• Market risk, also known as systematic risk, refers to the potential for losses due to factors that affect the overall performance of the financial markets and the entire economy. • Factors like changes in inflation, interest rates, and broader economic conditions are considered macroeconomic variables that influence the entire market and are key components of market risk. • Because these factors affect all firms and all industries, they are considered non-diversifiable, meaning you cannot eliminate this risk by investing in a variety of companies or sectors.
Inflation, changes in interest ration and changes in economic condition affect all firms and all industries. These factors are part of?
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