Answer: exogenous risk.

## Explanation Earthquakes are **exogenous risks** because they originate from external factors outside the economic or financial system. Let's analyze each option: **A. Event risk** - This refers to risks associated with specific events like mergers, acquisitions, or corporate actions. While earthquakes are events, they are not typically classified as event risk in financial contexts. **B. Thematic risk** - This relates to risks associated with investment themes or trends (e.g., technology disruption, demographic shifts). Earthquakes don't fit this category. **C. Exogenous risk** - **CORRECT**. Exogenous risks are external shocks that originate outside the economic system and affect it from the outside. Natural disasters like earthquakes, tsunamis, or pandemics are classic examples of exogenous risks because: 1. They are external to the economic system 2. They are unpredictable and not caused by economic factors 3. They can have significant impacts on economic activity, infrastructure, and financial markets Exogenous risks contrast with **endogenous risks**, which originate within the economic system itself (e.g., financial crises, policy changes). **Key Takeaway**: In risk classification, natural disasters are typically categorized as exogenous risks because they are external shocks to the economic system.

Author: LeetQuiz .