GENERAL KNOWLEDGE

Detailed explanation-1: -Systematic risk is both unpredictable and impossible to completely avoid. It cannot be mitigated through diversification, only through hedging or by using the correct asset allocation strategy. Systematic risk underlies other investment risks, such as industry risk.

Detailed explanation-2: -Key Takeaways. Systematic risk cannot be eliminated through diversification since it is a nonspecific risk that affects the entire market. The beta of a stock or portfolio will tell you how sensitive your holdings are to systematic risk, where the broad market itself always has a beta of 1.0.

Detailed explanation-3: -All investments or securities are subject to systematic risk and, therefore, it is a non-diversifiable risk. Systematic risk cannot be diversified away by holding a large number of securities.

Detailed explanation-4: -The idea behind diversification is to minimize (or even eliminate) risk within a portfolio. However, there are certain types of risks you can diversify away, and there are certain types of risks that exist regardless of how you diversify. These types of risks are called unsystematic risk and systematic risk.