Economics Stock Market Questions
Non-diversifiable risk, also known as systematic risk or market risk, refers to the risk that is inherent in the overall market or economy and cannot be eliminated through diversification. It affects the entire market or a specific segment of it, and is caused by factors such as economic conditions, political events, interest rates, inflation, and market volatility. Non-diversifiable risk cannot be reduced by holding a diversified portfolio, as it affects all investments in the market.