Question

Question 2 (of 17) 2. value: 5.00 points Which of the following would be considered Systemic Risk? A clothier is fined for unlawful labor laws abroad O A company has a large recall of their most important product O A hurricane runs up the entire east coast shutting down markets A firms patent runs out 2019 McGraw-Hill Education 63 34,727 AUG 00)

Answer 1

Definition of Systemic Risk

Systemic Risk is due to the market factors or the risk that could cause a collapse of the entire market or economy (a war or natural disaster). It is not a firm-specific risk. Systemic risk affects the entire market

A hurricane runs up the entire east coast shutting down markets is an example of systemic risk because it affects the entire market.

Answer

A hurricane runs up the entire east coast shutting down markets is considered as an example of Systemic Risk.