Question

Do you think an epidemic like the COVID-19 virus outbreak is a systematic risk? Explain.

  1. Do you think an epidemic like the COVID-19 virus outbreak is a systematic risk? Explain.

Homework Answers

Answer #1

Yes, it is a systematic risk. It has affected all industries . There is a slowdown in economy across all sectors. Production of goods and services have slowed down, also demand for many items have reduced. The government has announed stimulus packages for the entire economy. Only pharmaceutical sector has a chance of making profits but lack of workers , production and over burderened staff effect even this sector during this epidemic. Technology sectors depend on manufactring and banking sector for business. Hence all sectors get affected due to epidemics. Flight services, Transportation,tourism and other related industries come to a standstill. The stock market or shar prices of nearly all companies have fallen down. This indicates it is systematic risk.

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