What are different types of Risks?
Answer Posted / haji
there are 2 types of risk.
1.systematic risk, sometimes called market risk, aggregate
risk, or undiversifiable risk, is the risk associated with
aggregate market returns.
2. unsystematic risk, sometimes called specific risk,
idiosyncratic risk, residual risk, or diversifiable risk,
is the company-specific or industry-specific risk in a
portfolio, which is uncorrelated with aggregate market
returns.
Unsystematic risk can be mitigated through diversification,
and systematic risk can not be.
Systematic risk should not be confused with systemic risk,
the risk of loss from some catastrophic event that
collapses the entire financial system.
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