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    Question

    Among investment risks, systematic risk is characterized

    by which of the following attributes?
    A Specific to individual companies Correct Answer Incorrect Answer
    B Diversifiable through adequate portfolio construction Correct Answer Incorrect Answer
    C Non-diversifiable and market-wide Correct Answer Incorrect Answer
    D Limited exclusively to emerging markets Correct Answer Incorrect Answer
    E Directly linked only to credit quality of issuers Correct Answer Incorrect Answer

    Solution

    Systematic risk affects the whole market (e.g., interest rates, inflation). It cannot be avoided through diversification and impacts all securities.

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