What is a characteristic of systematic risk?

Systematic risk refers to the inherent risk that affects the entire market or a significant portion of it, rather than being tied to a particular company or industry. This type of risk is related to broader economic factors such as interest rates, inflation, political events, and natural disasters. Since it impacts all investments to some extent, it cannot be eliminated through diversification, which is effective for unsystematic risk that affects specific companies or sectors. Therefore, the characteristic that systematic risk impacts the entire market accurately describes its nature, heightening the potential for widespread effects across various asset classes.