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Systematic Risk

Which of the following statements concerning systematic risk is correct?

  1. It can be greatly reduced by owning a diversified portfolio of common stocks.
  2. It covers those types of risks that cause all securities to move together in a systematic manner.
  3. Business risk, such as a strike at an individual firm, is considered systematic risk.
  4. It includes financial risk, or risk arising when the firm borrows heavily to finance its activities.