Which one of the following is an example of systematic risk?
A) the price of lumber declines sharply
B) airline pilots go on strike
C) the Federal Reserve increases interest rates
D) a hurricane hits a tourist destination
E) people become diet conscious and avoid fast food restaurants

Question

Quizplus · Accepted Answer

Systematic risk refers to the risk that affects the overall market, such as interest rates, inflation, or economic recessions. The Federal Reserve increasing interest rates is an example of systematic risk as it affects the entire economy and most businesses. The other choices are more specific to certain industries or companies and therefore represent unsystematic or idiosyncratic risk.

Which One of the Following Is an Example of Systematic