Which of the following is NOT a systematic risk? A

Finance Dec 19, 2020

Which of the following is NOT a systematic risk?

A. Recession caused by COVID-19 pandemic

B. Recall of GM trucks due to defective airbags

C. Change in government spending

D. Change in monetary policy

Expert Solution

Answer. B. Recall of GM trucks due to defective airbags.

Unsystematic risk is the risk which is related to the specific company or stock and it will vary due to change in factors specfic to the company not general in nature.

Systematic risk is the risk which are general in nature and it will effect the companies in general in varying degree.

In this case Recession caused by COVID-19 pandemic, Change in government spending and Change in monetary policy which effect the performance all or most of the companies. Systematic risk rising from the factors general to the public.

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