Systematic risk primarily affects which of the following?

Systematic risk refers to the risk that affects the entire market or economy rather than just a specific company or sector. It encompasses factors that impact all investments to some extent, such as changes in interest rates, inflation, political instability, or economic downturns. Systematic risk cannot be diversified away by holding a varied portfolio of assets, as it is inherent to the market itself.

This characteristic distinguishes systematic risk from unsystematic risk, which is specific to individual assets or sectors. Thus, when considering the options presented, the correct response highlights that systematic risk is significant at a macro level, impacting all sectors of the economy instead of localized entities or individuals engaged in specific businesses or insurance policies.