alleryStart learning →Systematic risk is described as the risk of holding the:
AMarket portfolio
BSingle best stock
CGovernment bond
DCompany payroll
Answer & Solution
Correct answer: A. Market portfolio
1. Systematic risk is defined against the whole market.
2. Risk splits into systematic and unsystematic parts.
3. Systematic risk is the risk of holding the market portfolio.
4. It cannot be diversified away.
_Source: OpenStax Principles of Finance (CC BY 4.0), Ch 15 'Risk, Return, and Capital Market Theory'_
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