Definition of Systematic Risk

Systematic risk is the risk inherent in any investment in the market. An investor may lose money simply because the market is going down.

Applying "Systematic Risk" to Securities Exams:

All investors in the stock market are subject to systematic risk. An investor may own stock in great company whose earnings are growing rapidly and exceeding expectations but may be losing money because the value of their stock is going down because prices in the stock market as a whole are falling.

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