The recent housing bubble and resulting credit crisis of 2008 is a perfect example of:
A)nonsystematic risk
B)systematic risk
C)inflation risk
D)political risk

Question

Quizplus · Accepted Answer

The housing bubble and credit crisis of 2008 had a significant impact on the economy as a whole, not just on a specific sector or company. This type of risk is known as systematic risk, which refers to risks that affect the entire market or economy, including factors such as political events, economic cycles, and natural disasters. Nonsystematic risk, on the other hand, is specific to a particular company or industry and can be diversified away through proper portfolio management. Inflation risk and political risk may also be factors that contribute to systematic risk but are not the best choice for this particular example.

The Recent Housing Bubble and Resulting Credit Crisis of 2008