If the Federal Reserve were to change from an expansionary to a contractionary monetary policy, this would be an example of ________.
A) unsystematic risk
B) systematic risk
C) independent risk
D) diversification risk

Question

Quizplus · Accepted Answer

Systematic risk refers to the overall risk that affects all assets in the market, often linked to economic, political, or societal factors. A change in the Federal Reserve's monetary policy, such as moving from expansionary to contractionary, impacts the entire economy and thus represents a systematic risk.

If the Federal Reserve Were to Change from an Expansionary