SIE practice questionmediumSystematic vs unsystematic risk
Which of the following is an example of unsystematic risk?
- AA recession hurts all companies
- BA company’s CEO resigns unexpectedly✓ Correct answer
- CA spike in inflation hurts all bonds
- DA rise in interest rates lowers stock prices overall
Explanation
Why B — A company’s CEO resigns unexpectedly
A CEO's resignation is specific to one company—unsystematic risk. Recession, inflation, and interest rate changes affect the whole market (systematic risk).
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