Series 7 Exam Question 187: Answer and Explanation

Question: 187

Which of the following securities are subject to systematic risk?

I. common stock

II. preferred stock

III. municipal bonds

• A. I and II
• B. II and III
• C. I and III
• D. I, II, and III

Correct Answer: D

Explanation:

D. Systematic risk is also known as market risk. Systematic risk is the risk that securities could decline due to negative market conditions. All securities are subject to systematic risk.