Why Is Systematic Risk Also Called Non- Diversifiable Risk

question 23

Multiple Choice

Why is systematic risk also called non- diversifiable risk?

• A)It is risk which is driven by broad market- related factors and therefore common to all securities.
• B)It is a residual risk,with no way of being quantified.
• C)It is risk which is specific to each individual security.
• D)None of the above

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Definitions:

Government Imposes

Refers to regulations, taxes, or policies that a government enforces or puts into effect in order to manage the country's affairs.

Floor

The minimum price or wage level that is legally or otherwise formally set, below which the actual price or wage cannot fall.

Equilibrium Price

The selling rate at which the number of products on offer is the same as the number of products wanted.

Equilibrium Quantity

The quantity of a product or service at which the quantity supplied is equal to the quantity demanded at the market price.