A sudden, global increase in policy interest rates is best classified as:

Question

BlackTom AI · Accepted Answer

A sudden, global increase in policy interest rates affects the entire financial system by raising borrowing costs, increasing discount rates used to value assets, and altering consumer and corporate spending—this is classic systematic (market-wide) risk.

1. Relevant concepts
- Systematic (market-wide) risk: risk that affects a large number of assets across the market or economy and cannot be eliminated by diversification (e.g., interest rate shocks, recessions, inflation surprises).
- Unsystematic/firm-specific risk: risk unique to a single firm or small group of firms (e.g., management fraud, product failure) and can be reduced by diversification.
- Operational risk at a single firm: losses from failed internal processes, systems, or people at a particular company.
- Liquidity risk unique to one stock: inability to trade a specific security without substantially impacting its price due to low market depth for that stock.

2. Step-by-step reasoning
- Step 1: Characterize the event: “global increase in policy interest rates” means central banks worldwide raise benchmark rates.
- Step 2: Trace economy-wide effects: higher policy rates push market yields up, increase corporate borrowing costs, reduce present values by raising discount rates, and tend to lower aggregate demand. These effects influence bond prices, equity valuations, real estate, and corporate investment across many sectors and countries.
- Step 3: Determine pervasiveness and diversifiability: because many asset classes and firms are affected simultaneously, the risk cannot be eliminated by holding a diversified portfolio—thus it is systematic.

3. Why the correct answer is correct
A global interest-rate increase meets the defining features of systematic risk: broad-based impact and non-diversifiability. It shifts the market’s risk-return tradeoff and affects the entire economy.

4. Why other options are incorrect
- Operational risk at a single firm: refers to internal failures at one company, not economy-wide policy changes.
- Liquidity risk unique to one stock: concerns trading depth for a specific security, whereas an interest-rate shock affects many securities simultaneously.
- Firm-specific risk: pertains to isolated events affecting a single company; a global policy move is not firm-specific.

Conclusion: Therefore, the event is Systematic (market-wide) risk, matching the provided correct answer.

A sudden, global increase in policy interest rates is best classified as:单项选择题

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