Brexit, Greece Crises, Chinese Crises, Sub-Prime Crises are the examples of which of the following?
• Systematic Risk
• Unsystematic Risk
• Total Risk
• Specific Risk
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system is a bit of a new one, I am back to me and the rest is not rated and the
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Brexit, Greece Crises, Chinese Crises, and Sub-Prime Crises are examples of Systematic Risk. The risk that is inherent to the entire market or market sector is referred to as systemic risk.
- Systematic risk, also referred to as "undiversifiable risk," "volatility," or "market risk," has an impact on the entire market as a whole rather than just a certain stock or sector.
- This type of risk is different from unsystematic risk, which impacts a certain economic sector or security.
- Since systematic risk is completely unpredictable, it is generally thought to be difficult to prevent.
- Investors can somewhat mitigate the effects of systematic risk by diversifying their holdings.
- Examples of the global financial crisis include those mentioned above.
- A global financial crisis can be defined as the duration or time frame of an exceptionally stressed position in both the banking sector and the global financial markets.
Below is a list of some of the crisis's multiple root causes:
1. An increase in bank and investor borrowing.
2. Mistakes in the creation of rules and policies.
3. Taking unwarranted risks in a macroeconomic setting.
Hence Option A Systematic Risk is the correct answer.
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