Question

An asset’s risk (sensitivity related to the overall economy and market movement is called its ________________

a. total risk.
b. diversifiable risk.
c. systematic risk.
d. idiosyncratic risk.

Answer 1

I think the answer for this problem is letter a. total risk.  When we refer to a total risk it means that there is an overall possibility of financial loss or danger showed by a specific course of action. So in the statement above it refers to the overall economy and market movement. So I think the answer is total risk. Because the rest of the choices are just referring to 1 specific area of risk in a company.