SIE (Securities Industry Essentials) Practice Exam

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Single stock or single sector risk falls into which category?

  1. Systematic risk

  2. Non-systematic risk

  3. Fixed risk

  4. Variable risk

The correct answer is: Non-systematic risk

Single stock or single sector risk falls into the category of non-systematic risk. Systematic risk refers to risks that affect the entire market, such as economic or political factors. Fixed risk and variable risk are not relevant categories in this context. Non-systematic risk, also known as idiosyncratic risk, is specific to a particular company or industry and can be mitigated through diversification. Therefore, single stock or single sector risk falls into the category of non-systematic risk.

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