SIE practice questionhardSystematic vs. Unsystematic risk
Which of the following is considered an unsystematic risk?
- AMarket risk
- BInterest rate risk
- CBusiness risk✓ Correct answer
- DInflation risk
Explanation
Why C — Business risk
Business risk is unsystematic and specific to a particular company, and can be reduced through diversification. Market, interest rate, and inflation risks are systematic and affect all or most securities in the market.
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