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Capm- Capital Asset Pricing Model

Systematic and Unsystematic Risk

Date : 10/08/2020

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Amanpreet

Uploaded by : Amanpreet
Uploaded on : 10/08/2020
Subject : CIMA

Systematic risk is general risk of the market which cannot be controlled by the management.

Unsystematic risk is specific risk which could be controlled by diversification.
One common example of portfolio investment is put all eggs in different baskets instead of putting in one basket.
Below are the examples of Systematic and unsystematic risk.

Systematic Risk These are market risks that is, general perils of investing that cannot be diversified away. Interest rates, recessions, and wars are examples of systematic risks. Unsystematic Risk Also known as "specific risk," this risk relates to individual stocks

This resource was uploaded by: Amanpreet