Which of the following describes a characteristic of systematic risk?

Systematic risk refers to the inherent risk that affects the entire market or a particular segment of the market, rather than being tied to a specific company or industry. This type of risk includes factors such as economic downturns, political instability, changes in interest rates, and natural disasters. Because it impacts all investments within the market, it cannot be avoided through diversification, which is a strategy that can mitigate specific risks associated with individual companies or sectors. Thus, systematic risk influences the overall market performance and cannot be eliminated by careful investment selection, making it a fundamental element for investors to understand when assessing their portfolios. Understanding this characteristic helps managers evaluate their exposure to broader economic changes rather than just the unique risks linked to individual investments.