Which of the following is a characteristic of systematic risk?

Systematic risk refers to the inherent risk associated with the overall market or economy that cannot be eliminated through diversification. It affects a broad range of assets simultaneously because it is tied to market-wide factors, such as interest rates, inflation, geopolitical events, and economic recessions. When these factors change, they impact the entire market, leading to volatility in the pricing of all investments, making systematic risk a prevalent concern for investors.

In contrast, the other choices inaccurately describe systematic risk. The notion that it can be eliminated through diversification only applies to unsystematic risk, which is specific to individual investments and can be mitigated by holding a diverse portfolio. The claim that it is specific to individual investments is also characteristic of unsystematic risk, which varies from security to security. Lastly, systematic risk is heavily influenced by economic factors, so it cannot be viewed as free from their impact. Therefore, the correct understanding of systematic risk is that it affects a wide array of investments concurrently, justifying its identification as a characteristic tied to broad market phenomena.