n NISM Certifications
XXI NISM Series XXI-A
Medium

Which of the following best describes "Market Risk"?

Practice question from NISM XXI A for PMS - Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Risk associated with individual securities due to company-specific factors

  2. Risk affecting the entire market or economy

    Correct answer

  3. C

    Risk that can be eliminated through diversification

  4. D

    Risk related to currency fluctuations only

Why this is the answer

Market risk, or systematic risk, impacts all securities and cannot be diversified away.

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