systemic risk


Risk that affects an entire financial market or system, and not just specific participants. It is not possible to avoid systemic risk through diversification.

Use systemic risk in a sentence

You need to understand what the systemic risk of any investment is before you decide to take it on fully.

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It was a systemic risk because it would effect the entire business if there was any kind of failure in it.

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The systemic risk was significant and unavoidable in the market, all of our competitors shared the same type of risk as well.

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multifactor CAPM systematic risk principle