Final answer:
Systematic risk is the type of risk that impacts the entire market and cannot be mitigated through diversification, as opposed to diversifiable risk, which affects specific companies or industries.
Step-by-step explanation:
The type of risk represented by a news announcement that causes a widespread loss in stock values across various companies is known as systematic risk. Systematic risk affects the entire market or a large segment of the market and cannot be eliminated through diversification. An example of systematic risk includes the stock market crash of 2008, where average U.S. stock funds declined 38%, illustrating how broad market downturns can impact the wealth of individuals and households. Unlike systematic risk, diversifiable risk, also known as unsystematic risk, affects only specific companies or industries and can be mitigated by diversifying a portfolio.