The risk present in all investment opportunities is known as ________ risk.

Question

Quizplus · Accepted Answer

Systematic risk is the risk present in all investment opportunities and cannot be diversified away through diversification. It is caused by macroeconomic factors such as inflation, interest rates, and geopolitical events. Nonsystematic risk, on the other hand, is specific to individual companies and can be minimized through diversification. Portfolio risk is a measure of total risk in an investment portfolio, and diversification is a strategy to minimize risk by investing in a variety of assets. However, neither portfolio risk nor diversification is the specific risk present in all investment opportunities.

The Risk Present in All Investment Opportunities Is Known as ________