Business and Personal Finance Dictionary

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• SYSTEMATIC RISK
  
  Systematic risk, also known as market risk, is the risk that's inherent in, or characteristic of, a particular type or class of security, such as stocks or bonds, as opposed to the risks posed by an individual security of that type. For example, the prices of existing bonds characteristically drop when interest rates go up. So a systematic or market risk of owning bonds is that you would probably realize less than the par value of a bond if you sold it in the secondary market after a jump in interest rates. That loss of value, however, would not reflect whether or not the individual bond was a good credit risk.
  
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