Asked by
Verified
Total risk - Systematic risk = Unsystematic risk
Total Risk
The sum of systematic and unsystematic risks affecting an investment or portfolio.
Systematic Risk
The risk inherent to the entire market or market segment, often impossible to mitigate through diversification alone.
Unsystematic Risk
Unsystematic risk, also known as company-specific risk or idiosyncratic risk, is the type of uncertainty that comes with a company or industry that can be mitigated through diversification.
- Segregate between systematic and unsystematic risks, with illustrations, and discuss their significance in the crafting of portfolio management strategies.
Verified Answer
Learning Objectives
- Segregate between systematic and unsystematic risks, with illustrations, and discuss their significance in the crafting of portfolio management strategies.
Related questions
A Decrease in a Firm's Cost of Borrowing Is an ...
An Increase in the Rate of GDP Growth Is an ...
An Example of Systematic Risk Would Be If the Stock ...
Latest Unemployment Figures Increased, as Expected Is Considered an Example ...
Diversifiable Risks Are Generally Associated with an Individual Firm or ...