Market Risk

Which statement(s) is/are FALSE about market risk?

I. It is mitigated by writing calls.

II. It includes the risk the investor will lose invested principal.

III. It is the same as systemic risk.

IV. It is mitigated by buying defensive stocks.


A. I only

B. II only

C. II and III

D. III and IV





Correct answer: B

Statement II describes capital risk not market risk.


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