Market risks that cannot be diversified

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CAPM argues that individual securities are exposed to two types of risks: 1) Corporate risks that can be diversified and 2) Market risks that cannot be diversified. So, no matter how much we diversify, we cannot diversify away the market risk. CAPM-Beta is then defined as the correlation of a security to the overall market portfolio. Please provide three (3) market events that cannot be diversified away. Hint: Your security domain should not be limited to stocks. For instance, one can easily diversify inflation risk by investing in Treasury inflation protected securities. Market risk should be non-diversifiable.

Reference no: EM131562431

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