Which of the following are examples of systematic risk?Multiple select question.future rates of inflationlabor strikesregulatory changes in tax ratesan increase in competition in the industry
Question
Which of the following are examples of systematic risk?Multiple select question.future rates of inflationlabor strikesregulatory changes in tax ratesan increase in competition in the industry
Solution
The examples of systematic risk from the options provided are:
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Future rates of inflation: Systematic risk involves factors that affect the entire market or economy, and inflation is a widespread economic phenomenon that can impact all sectors and industries. Therefore, future rates of inflation can be considered a systematic risk.
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Regulatory changes in tax rates: Changes in tax rates are decided by the government and apply to the entire economy. These changes can affect all businesses and industries, making them a systematic risk.
The other options, labor strikes and an increase in competition in the industry, are examples of unsystematic risk because they are specific to a particular company or industry.
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