Question

What is the difference between systematic and nonsystematic risk? What are some examples of each?

What is the difference between systematic and nonsystematic risk? What are some examples of each?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
BASIS FOR COMPARISON SYSTEMATIC RISK UNSYSTEMATIC RISK
Meaning Systematic risk refers to the hazard which is associated with the market or market segment as a whole. Unsystematic risk refers to the risk associated with a particular security, company or industry.
Nature Uncontrollable Controllable
Factors External factors Internal factors
Affects Large number of securities in the market. Only particular company.
Types Interest risk, market risk and purchasing power risk. Business risk and financial risk
Protection Asset allocation

Portfolio diversification


Examples of Systematic Risk
Changes in GDP
Inflation
Interest Rates

Total Risk for a Diversified Portfolio


Example of Unsystematic Risk
Well-Diversified Portfolios
Labor Strikes
Part Shortages

Thanks

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
what is the difference between diversifiable risk and systematic risk? provide examples as appropriate.
what is the difference between diversifiable risk and systematic risk? provide examples as appropriate.
Explain the difference between systematic and unsystematic risk, and why one of these types of risks...
Explain the difference between systematic and unsystematic risk, and why one of these types of risks is rewarded with a risk premium while the other type is not. Give some examples for systematic and unsystematic risk.
what is the difference between ionization and hydrolysis and can you give me some examples with...
what is the difference between ionization and hydrolysis and can you give me some examples with equations and explaining what is happening?
Whats the difference between social costs and economic costs? What would some examples be of social...
Whats the difference between social costs and economic costs? What would some examples be of social cost of smoking and economic costs of smoking?
What is the difference between mechanical and electromagnetic waves? Also, provide examples for each.
What is the difference between mechanical and electromagnetic waves? Also, provide examples for each.
Find out the values of total risk, systematic and nonsystematic risk of stock j in variance...
Find out the values of total risk, systematic and nonsystematic risk of stock j in variance term. The mean of excess market return is 1.33% The mean of excess return on asset j is 3.0% The variance of excess market return is 2.89% The variance of excess returns on asset j is 2.0% The covariance of excess market returns and excess returns on asset j is 2.33%
What is the difference between the three terms terminologies, ontologies and classifications? Give examples for each...
What is the difference between the three terms terminologies, ontologies and classifications? Give examples for each of these in the context of healthcare.
What is the difference between economic development and economic growth? Give examples of how each of...
What is the difference between economic development and economic growth? Give examples of how each of these concepts can be measured.
What is the difference between Emotional Intelligence and I.Q? Give examples explaining each. (Please answer in...
What is the difference between Emotional Intelligence and I.Q? Give examples explaining each. (Please answer in 4-5 Sentences)
Briefly describe the difference between primary motor areas and premotor areas. Give some examples.
Briefly describe the difference between primary motor areas and premotor areas. Give some examples.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT