What Is Systematic & Unsystematic Risk ?
Answers were Sorted based on User's Feedback
Answer / satish kumar
Risk in holding securities is generally associated with
possibility that realized returns will be less than the
returns that were expected.
Systematic risk
Unsystematic risk
Systematic risk refers to that portion of total variability
in return caused by factors affecting the prices of all
securities. Economic, political, and sociological changes
are sources of systematic risk. Their effect is to cause
prices of nearly all individual common stocks and/or all
individual bonds to move together in the same manner.
influences are external to the firm, cannot be controlled,
and affect large numbers of securities
1 Market Risk
2 Interest-Rate Risk
3 Purchasing-Power Risk
Unsystematic risk is the portion of total risk that is
unique to a firm or industry. Factors such as management
capability, consumer preferences, and labor strikes cause
systematic variability of returns in a firm.
Business Risk
Internal Business Risk
a) Fluctuation in sales.
b) Research &Development.
c) Personal Management.
d) Fixed cost.
e) Single product.
External Business Risk
a) Social factor
b) Political Risk
c) Business cycle
Financial Risk
| Is This Answer Correct ? | 11 Yes | 2 No |
Answer / nitin nimkar
systematic risk are unavoidable risk, such risk are caused by
macro events such as bomb blast, natural calamities becoz its
effect have on overall market, hence such risk an investor
can't diversified.
Unsystematic risk are avoidable risk such risk are caused by
micro events such as any specific industry problem (ex
problem in farmacular,software ind...),hence such risk an
investor can diversified by invest in well industries.
| Is This Answer Correct ? | 9 Yes | 2 No |
Answer / nabeel iqbal
systmetic risk concern with that risks which are natural in
nature and very rare to avoid from them as political
situation which every one facing so you also, but in
unsystmetic risk you can avoid by your technics and tricks
to reduce or get rid from them by R and D or by other by
using other financial tools.
Ns virgo(Federal urdu university islamabad)
| Is This Answer Correct ? | 4 Yes | 2 No |
Answer / bharath kumar
Systematic is non diversifiable
And unsystematic means diversifiable
| Is This Answer Correct ? | 1 Yes | 0 No |
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