________ refers to the risk that belongs to the whole market or market segment

Systematic risk is the risk that affects the entire market and cannot be removed through diversification. Examples include inflation interest rate changes recessions or political instability. Unlike unsystematic risk which is company specific systematic risk impacts all firms in a market. Investors must accept this risk since it is unavoidable. The Capital Asset Pricing Model includes systematic risk in its formula to calculate expected returns. For example if the whole stock market falls due to global crisis every company is affected regardless of its performance. Hence systematic risk is a core concept in finance.