What are different types of Risks?
Answer Posted / uma prasad
Risks are of two types:-
1. Systematic risk-
It occurs due to some rxternal factors such as direct
compitition, govt. policies, inflation, interest-rate,
change in legal structure & tax etc. This type of risk
cannot be reduced & prediced. It affects the entire market.
This is also known as uncontrollable or undiversified risk.
2. Unsystematic Risk-
It occurs due to some internal factors such as labour
strike, lock-out, capital mobilization, financial decision,
trade union, and company & management policy etc. this is
also known as controballable or diversifiable risk or
specific ris because we can reduce the risk by properly
diversifying holdings.
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