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All of the following items describe unsystematic risk, except?

1) Market risk
2) Business risk
3) Financial risk
4) Political risk

User Bob Tway
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1 Answer

5 votes

Final answer:

Market risk is the correct answer as it is a type of systematic risk affecting the entire market, unlike business risk, financial risk, and political risk, which are forms of unsystematic risk impacting specific companies or industries.

Step-by-step explanation:

The question addresses the concept of risk in finance, specifically the unsystematic risk associated with different financial assets. Unsystematic risk, also known as idiosyncratic or specific risk, pertains to factors that affect the performance of a particular company or industry. However, the exception in the listed items is Market risk, which is a type of systematic risk. Unlike unsystematic risk, market risk affects a large number of assets and is related to the broader economic, geopolitical, and financial factors that impact the entire market.

Therefore, the correct answer is: 1) Market risk, as this risk is linked to the entire market and is not specific to a particular company or sector. Business risk, financial risk, and political risk are forms of unsystematic risk, as they can affect individual companies or sectors differently.

User Mlr
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