The correct answer is: B. market risk
Market risk is the risk that the overall market will go up or down, regardless of the performance of any individual company. It is also known as systematic risk or non-diversifiable risk.
War, recessions, inflation, and high interest rates are all examples of factors that can affect the overall market. These factors can cause the stock market to go up or down, even if individual companies are doing well.
Diversifiable risk is the risk that is specific to a particular company or industry. It can be eliminated by investing in a diversified portfolio of stocks.
Stock risk is the risk that an individual stock will go up or down in price. It is a combination of market risk and diversifiable risk.
Portfolio risk is the risk of a portfolio of stocks. It is a combination of market risk, diversifiable risk, and the specific risks of the stocks in the portfolio.
Here is a table that summarizes the different types of risk:
| Type of risk | Description |
|—|—|
| Market risk | The risk that the overall market will go up or down, regardless of the performance of any individual company. |
| Diversifiable risk | The risk that is specific to a particular company or industry. It can be eliminated by investing in a diversified portfolio of stocks. |
| Stock risk | The risk that an individual stock will go up or down in price. It is a combination of market risk and diversifiable risk. |
| Portfolio risk | The risk of a portfolio of stocks. It is a combination of market risk, diversifiable risk, and the specific risks of the stocks in the portfolio. |