Systematic risk impacts which of the following?

Systematic risk, also known as market risk, refers to the inherent risk that affects an entire market or a significant market segment. This type of risk is influenced by broader economic factors, such as changes in interest rates, inflation, geopolitical events, or natural disasters, which impact all investments across the board, rather than just specific assets or markets.

When we say it affects the entire market or a substantial segment, we recognize that it cannot be mitigated through diversification alone, as opposed to unsystematic risk, which is specific to individual securities. For instance, a market-wide downturn caused by economic recession impacts almost all stocks and broader market indices, illustrating the nature of systematic risk focusing on macroeconomic factors. Thus, the correct answer highlights that systematic risk is a pervasive influence on the overall market rather than being limited to specific stocks, commodities, or government securities.