SlideShare a Scribd company logo
Presentation on
Systematic risk, also known as "market risk" or "un-diversifiable
risk", is the uncertainty inherent to the entire market or entire market
segment. Also referred to as volatility, systematic risk consists of the
day-to-day fluctuations in a stock's price.
Types of Systematic Risk:
 Interest risk
 Market risk
 Inflation risk
Unsystematic risk, also known as "specific risk,"
"diversifiable risk" or "residual risk," is the type of
uncertainty that comes with the company or industry you
invest in. Unsystematic risk can be reduced through
diversification
Types of Unsystematic Risk:
 Business risk
 Financial risk
 Systematic risk means the possibility of loss associated with the
whole market or market segment. Unsystematic risk means risk
associated with a particular industry or security.
 Systematic risk is uncontrollable whereas the unsystematic risk is
controllable.
 Systematic risk arises due to macroeconomic factors. On the other
hand, the unsystematic risk arises due to the micro-economic factors
 Systematic risk affects a large number of securities in the market.
Conversely, unsystematic risk affects securities of a particular company.
 Systematic risk can be eliminated through several ways like hedging,
asset allocation and diversification. As opposed to unsystematic risk that
can be eliminated through portfolio diversification
 Systematic risk is divided into three categories, i.e. Interest risk, market
risk and purchasing power risk. Unlike unsystematic risk, which is
divided into two broad category business risk and financial risk.
Difference between systematic and unsystematic risk

More Related Content

What's hot

Portfolio selection, markowitz model
Portfolio selection, markowitz modelPortfolio selection, markowitz model
Portfolio selection, markowitz model
aarthi ramakrishnan
 
Capital market instruments
Capital market instrumentsCapital market instruments
Capital market instruments
kartikganga
 
Introduction portfolio management
Introduction portfolio managementIntroduction portfolio management
Introduction portfolio management
Noorulhadi Qureshi
 
Portfolio mangement
Portfolio mangementPortfolio mangement
Portfolio mangementPolite Man
 
Risk, return, and portfolio theory
Risk, return, and portfolio theoryRisk, return, and portfolio theory
Risk, return, and portfolio theoryLatha Chilukamarri C
 
security-analysis-and-portfolio-management.ppt
security-analysis-and-portfolio-management.pptsecurity-analysis-and-portfolio-management.ppt
security-analysis-and-portfolio-management.ppt
NiyatiK2
 
Efficient market hypothesis
Efficient market hypothesisEfficient market hypothesis
Efficient market hypothesisKamlesh Pawar
 
Fundamental analysis and technical analysis
Fundamental analysis and technical analysisFundamental analysis and technical analysis
Fundamental analysis and technical analysis
Mohammed Umair
 
Portfolio management ppt
Portfolio management pptPortfolio management ppt
Portfolio management ppt
Jiyas K
 
Efficient Market Hypothesis (EMH)
Efficient Market Hypothesis (EMH)Efficient Market Hypothesis (EMH)
Efficient Market Hypothesis (EMH)
Faheem Hasan
 
Classification of risk
Classification of riskClassification of risk
Classification of risk
Shaik Mohammad Imran
 
Fundamental and Technical Analysis
Fundamental and Technical AnalysisFundamental and Technical Analysis
Fundamental and Technical Analysis
MACFAST
 
Investment meaning nature
Investment meaning natureInvestment meaning nature
Investment meaning naturereema21
 
Investment Management Risk and Return
Investment Management Risk and ReturnInvestment Management Risk and Return
Investment Management Risk and Return
Dr. John V. Padua
 
Investment management
Investment managementInvestment management
Investment management
hadi Hedayati
 
Bonds
BondsBonds
behavioral finance intro
behavioral finance introbehavioral finance intro
behavioral finance intro
HarvinderSingh11700
 

What's hot (20)

Portfolio selection, markowitz model
Portfolio selection, markowitz modelPortfolio selection, markowitz model
Portfolio selection, markowitz model
 
Capital market instruments
Capital market instrumentsCapital market instruments
Capital market instruments
 
Risk & return analysis
Risk & return analysisRisk & return analysis
Risk & return analysis
 
Introduction portfolio management
Introduction portfolio managementIntroduction portfolio management
Introduction portfolio management
 
Portfolio mangement
Portfolio mangementPortfolio mangement
Portfolio mangement
 
Risk, return, and portfolio theory
Risk, return, and portfolio theoryRisk, return, and portfolio theory
Risk, return, and portfolio theory
 
security-analysis-and-portfolio-management.ppt
security-analysis-and-portfolio-management.pptsecurity-analysis-and-portfolio-management.ppt
security-analysis-and-portfolio-management.ppt
 
Portfolio analysis
Portfolio analysisPortfolio analysis
Portfolio analysis
 
Efficient market hypothesis
Efficient market hypothesisEfficient market hypothesis
Efficient market hypothesis
 
Fundamental analysis and technical analysis
Fundamental analysis and technical analysisFundamental analysis and technical analysis
Fundamental analysis and technical analysis
 
Portfolio management ppt
Portfolio management pptPortfolio management ppt
Portfolio management ppt
 
Efficient Market Hypothesis (EMH)
Efficient Market Hypothesis (EMH)Efficient Market Hypothesis (EMH)
Efficient Market Hypothesis (EMH)
 
Classification of risk
Classification of riskClassification of risk
Classification of risk
 
Fundamental and Technical Analysis
Fundamental and Technical AnalysisFundamental and Technical Analysis
Fundamental and Technical Analysis
 
Investment meaning nature
Investment meaning natureInvestment meaning nature
Investment meaning nature
 
Investment Management Risk and Return
Investment Management Risk and ReturnInvestment Management Risk and Return
Investment Management Risk and Return
 
Investment management
Investment managementInvestment management
Investment management
 
Bonds
BondsBonds
Bonds
 
Efficient Market Hypothesis
Efficient Market HypothesisEfficient Market Hypothesis
Efficient Market Hypothesis
 
behavioral finance intro
behavioral finance introbehavioral finance intro
behavioral finance intro
 

Viewers also liked

антивірус
антивірусантивірус
антивірус
Elena Vasileva
 
Green finance
Green financeGreen finance
Green finance
SOJIBSABBIR
 
3Com USR 56K V.90
3Com USR 56K V.903Com USR 56K V.90
3Com USR 56K V.90
savomir
 
Up-Sale решения от Intui.travel transfer для OTA , Metasearch, сайтов по п...
Up-Sale решения от Intui.travel transfer  для OTA , Metasearch,  сайтов  по п...Up-Sale решения от Intui.travel transfer  для OTA , Metasearch,  сайтов  по п...
Up-Sale решения от Intui.travel transfer для OTA , Metasearch, сайтов по п...
Ilya Balakhnichev
 
Office 365 でひも解く、あいさつから見る文化の違い
Office 365 でひも解く、あいさつから見る文化の違いOffice 365 でひも解く、あいさつから見る文化の違い
Office 365 でひも解く、あいさつから見る文化の違い
Hirofumi Ota
 
Words to kamiyama
Words to kamiyamaWords to kamiyama
Words to kamiyama
Jesus Montenegro
 
Industrial sector of Bangladesh
 Industrial sector of Bangladesh Industrial sector of Bangladesh
Industrial sector of Bangladesh
Saifuddin Nezami
 
Office 365 グループ設定項目を見てみよう(2017年3月時点版)
Office 365 グループ設定項目を見てみよう(2017年3月時点版)Office 365 グループ設定項目を見てみよう(2017年3月時点版)
Office 365 グループ設定項目を見てみよう(2017年3月時点版)
Hirofumi Ota
 
Barcode invention & evolution
Barcode  invention & evolutionBarcode  invention & evolution
Barcode invention & evolution
FACTS Computer Software L.L.C
 
News of raipur
News of raipurNews of raipur
News of raipur
rajpootrohan
 
Profession gr
Profession grProfession gr
Profession gr
Aspa Tzavara
 
Barcode invention & evolution
Barcode  invention & evolutionBarcode  invention & evolution
Barcode invention & evolution
FACTS Computer Software L.L.C
 
TI quidam
TI quidamTI quidam

Viewers also liked (13)

антивірус
антивірусантивірус
антивірус
 
Green finance
Green financeGreen finance
Green finance
 
3Com USR 56K V.90
3Com USR 56K V.903Com USR 56K V.90
3Com USR 56K V.90
 
Up-Sale решения от Intui.travel transfer для OTA , Metasearch, сайтов по п...
Up-Sale решения от Intui.travel transfer  для OTA , Metasearch,  сайтов  по п...Up-Sale решения от Intui.travel transfer  для OTA , Metasearch,  сайтов  по п...
Up-Sale решения от Intui.travel transfer для OTA , Metasearch, сайтов по п...
 
Office 365 でひも解く、あいさつから見る文化の違い
Office 365 でひも解く、あいさつから見る文化の違いOffice 365 でひも解く、あいさつから見る文化の違い
Office 365 でひも解く、あいさつから見る文化の違い
 
Words to kamiyama
Words to kamiyamaWords to kamiyama
Words to kamiyama
 
Industrial sector of Bangladesh
 Industrial sector of Bangladesh Industrial sector of Bangladesh
Industrial sector of Bangladesh
 
Office 365 グループ設定項目を見てみよう(2017年3月時点版)
Office 365 グループ設定項目を見てみよう(2017年3月時点版)Office 365 グループ設定項目を見てみよう(2017年3月時点版)
Office 365 グループ設定項目を見てみよう(2017年3月時点版)
 
Barcode invention & evolution
Barcode  invention & evolutionBarcode  invention & evolution
Barcode invention & evolution
 
News of raipur
News of raipurNews of raipur
News of raipur
 
Profession gr
Profession grProfession gr
Profession gr
 
Barcode invention & evolution
Barcode  invention & evolutionBarcode  invention & evolution
Barcode invention & evolution
 
TI quidam
TI quidamTI quidam
TI quidam
 

Similar to Difference between systematic and unsystematic risk

Risk management
Risk managementRisk management
Risk management
Jai Yadav
 
Risk & Types of Risk By Kanhu.pptx
Risk & Types of Risk By Kanhu.pptxRisk & Types of Risk By Kanhu.pptx
Risk & Types of Risk By Kanhu.pptx
Kanhu Charan Sahoo
 
Risk
RiskRisk
1. Risk and its different types of risk .
1. Risk and its different types of risk .1. Risk and its different types of risk .
1. Risk and its different types of risk .
VadivelM9
 
Risk
RiskRisk
Chapter 2 - Risk Management - 2nd Semester - M.Com - Bangalore University
Chapter 2 - Risk Management - 2nd Semester - M.Com - Bangalore UniversityChapter 2 - Risk Management - 2nd Semester - M.Com - Bangalore University
Chapter 2 - Risk Management - 2nd Semester - M.Com - Bangalore University
Swaminath Sam
 
RISK & RETURN
RISK & RETURN RISK & RETURN
RISK & RETURN
ANMOL GULATI
 
risk and returns of market goods products
risk and returns of market goods productsrisk and returns of market goods products
risk and returns of market goods products
DivyaGwda
 
Concept of risk
Concept of riskConcept of risk
Concept of risk
RiteshGoswami2
 
Risk Analysis
Risk Analysis Risk Analysis
Risk Analysis
Janet Cometa
 
Risk and types of risk measurement of risk
Risk and types of risk measurement of riskRisk and types of risk measurement of risk
Risk and types of risk measurement of risk
santhosh77
 
risk and return.pptx
risk and return.pptxrisk and return.pptx
risk and return.pptx
Vikash Barnwal
 
Equity - Types of Risk
Equity - Types of RiskEquity - Types of Risk
Equity - Types of Riskflame2011
 
Fixed income
Fixed incomeFixed income
Fixed income
AYUSHGaur31
 
Modelos estocásticos para la valoración de riesgo financiero
Modelos estocásticos para la valoración de riesgo financieroModelos estocásticos para la valoración de riesgo financiero
Modelos estocásticos para la valoración de riesgo financiero
LAURAMICHAELA
 
Risk and return
Risk and returnRisk and return
Risk and return
Mohammed Arif Pasha
 
Chapter1 introduction to risk management
Chapter1  introduction to risk managementChapter1  introduction to risk management
Chapter1 introduction to risk management
Dr Riyaz Muhmmad
 
Risk Management
Risk ManagementRisk Management
Risk Management
Elango Tilak
 

Similar to Difference between systematic and unsystematic risk (20)

Risk management
Risk managementRisk management
Risk management
 
8. risk
8. risk8. risk
8. risk
 
Risk & Types of Risk By Kanhu.pptx
Risk & Types of Risk By Kanhu.pptxRisk & Types of Risk By Kanhu.pptx
Risk & Types of Risk By Kanhu.pptx
 
Risk
RiskRisk
Risk
 
1. Risk and its different types of risk .
1. Risk and its different types of risk .1. Risk and its different types of risk .
1. Risk and its different types of risk .
 
Risk
RiskRisk
Risk
 
Chapter 2 - Risk Management - 2nd Semester - M.Com - Bangalore University
Chapter 2 - Risk Management - 2nd Semester - M.Com - Bangalore UniversityChapter 2 - Risk Management - 2nd Semester - M.Com - Bangalore University
Chapter 2 - Risk Management - 2nd Semester - M.Com - Bangalore University
 
RISK & RETURN
RISK & RETURN RISK & RETURN
RISK & RETURN
 
risk and returns of market goods products
risk and returns of market goods productsrisk and returns of market goods products
risk and returns of market goods products
 
Concept of risk
Concept of riskConcept of risk
Concept of risk
 
Risk Analysis
Risk Analysis Risk Analysis
Risk Analysis
 
Risk and types of risk measurement of risk
Risk and types of risk measurement of riskRisk and types of risk measurement of risk
Risk and types of risk measurement of risk
 
risk and return.pptx
risk and return.pptxrisk and return.pptx
risk and return.pptx
 
Equity - Types of Risk
Equity - Types of RiskEquity - Types of Risk
Equity - Types of Risk
 
Fixed income
Fixed incomeFixed income
Fixed income
 
Fixed income
Fixed incomeFixed income
Fixed income
 
Modelos estocásticos para la valoración de riesgo financiero
Modelos estocásticos para la valoración de riesgo financieroModelos estocásticos para la valoración de riesgo financiero
Modelos estocásticos para la valoración de riesgo financiero
 
Risk and return
Risk and returnRisk and return
Risk and return
 
Chapter1 introduction to risk management
Chapter1  introduction to risk managementChapter1  introduction to risk management
Chapter1 introduction to risk management
 
Risk Management
Risk ManagementRisk Management
Risk Management
 

Recently uploaded

Affordable Stationery Printing Services in Jaipur | Navpack n Print
Affordable Stationery Printing Services in Jaipur | Navpack n PrintAffordable Stationery Printing Services in Jaipur | Navpack n Print
Affordable Stationery Printing Services in Jaipur | Navpack n Print
Navpack & Print
 
The effects of customers service quality and online reviews on customer loyal...
The effects of customers service quality and online reviews on customer loyal...The effects of customers service quality and online reviews on customer loyal...
The effects of customers service quality and online reviews on customer loyal...
balatucanapplelovely
 
April 2024 Nostalgia Products Newsletter
April 2024 Nostalgia Products NewsletterApril 2024 Nostalgia Products Newsletter
April 2024 Nostalgia Products Newsletter
NathanBaughman3
 
Enterprise Excellence is Inclusive Excellence.pdf
Enterprise Excellence is Inclusive Excellence.pdfEnterprise Excellence is Inclusive Excellence.pdf
Enterprise Excellence is Inclusive Excellence.pdf
KaiNexus
 
ModelingMarketingStrategiesMKS.CollumbiaUniversitypdf
ModelingMarketingStrategiesMKS.CollumbiaUniversitypdfModelingMarketingStrategiesMKS.CollumbiaUniversitypdf
ModelingMarketingStrategiesMKS.CollumbiaUniversitypdf
fisherameliaisabella
 
ENTREPRENEURSHIP TRAINING.ppt for graduating class (1).ppt
ENTREPRENEURSHIP TRAINING.ppt for graduating class (1).pptENTREPRENEURSHIP TRAINING.ppt for graduating class (1).ppt
ENTREPRENEURSHIP TRAINING.ppt for graduating class (1).ppt
zechu97
 
CADAVER AS OUR FIRST TEACHER anatomt in your.pptx
CADAVER AS OUR FIRST TEACHER anatomt in your.pptxCADAVER AS OUR FIRST TEACHER anatomt in your.pptx
CADAVER AS OUR FIRST TEACHER anatomt in your.pptx
fakeloginn69
 
Premium MEAN Stack Development Solutions for Modern Businesses
Premium MEAN Stack Development Solutions for Modern BusinessesPremium MEAN Stack Development Solutions for Modern Businesses
Premium MEAN Stack Development Solutions for Modern Businesses
SynapseIndia
 
The-McKinsey-7S-Framework. strategic management
The-McKinsey-7S-Framework. strategic managementThe-McKinsey-7S-Framework. strategic management
The-McKinsey-7S-Framework. strategic management
Bojamma2
 
VAT Registration Outlined In UAE: Benefits and Requirements
VAT Registration Outlined In UAE: Benefits and RequirementsVAT Registration Outlined In UAE: Benefits and Requirements
VAT Registration Outlined In UAE: Benefits and Requirements
uae taxgpt
 
amptalk_RecruitingDeck_english_2024.06.05
amptalk_RecruitingDeck_english_2024.06.05amptalk_RecruitingDeck_english_2024.06.05
amptalk_RecruitingDeck_english_2024.06.05
marketing317746
 
What is the TDS Return Filing Due Date for FY 2024-25.pdf
What is the TDS Return Filing Due Date for FY 2024-25.pdfWhat is the TDS Return Filing Due Date for FY 2024-25.pdf
What is the TDS Return Filing Due Date for FY 2024-25.pdf
seoforlegalpillers
 
Project File Report BBA 6th semester.pdf
Project File Report BBA 6th semester.pdfProject File Report BBA 6th semester.pdf
Project File Report BBA 6th semester.pdf
RajPriye
 
Introduction to Amazon company 111111111111
Introduction to Amazon company 111111111111Introduction to Amazon company 111111111111
Introduction to Amazon company 111111111111
zoyaansari11365
 
Exploring Patterns of Connection with Social Dreaming
Exploring Patterns of Connection with Social DreamingExploring Patterns of Connection with Social Dreaming
Exploring Patterns of Connection with Social Dreaming
Nicola Wreford-Howard
 
The Influence of Marketing Strategy and Market Competition on Business Perfor...
The Influence of Marketing Strategy and Market Competition on Business Perfor...The Influence of Marketing Strategy and Market Competition on Business Perfor...
The Influence of Marketing Strategy and Market Competition on Business Perfor...
Adam Smith
 
Buy Verified PayPal Account | Buy Google 5 Star Reviews
Buy Verified PayPal Account | Buy Google 5 Star ReviewsBuy Verified PayPal Account | Buy Google 5 Star Reviews
Buy Verified PayPal Account | Buy Google 5 Star Reviews
usawebmarket
 
anas about venice for grade 6f about venice
anas about venice for grade 6f about veniceanas about venice for grade 6f about venice
anas about venice for grade 6f about venice
anasabutalha2013
 
Kseniya Leshchenko: Shared development support service model as the way to ma...
Kseniya Leshchenko: Shared development support service model as the way to ma...Kseniya Leshchenko: Shared development support service model as the way to ma...
Kseniya Leshchenko: Shared development support service model as the way to ma...
Lviv Startup Club
 
Cree_Rey_BrandIdentityKit.PDF_PersonalBd
Cree_Rey_BrandIdentityKit.PDF_PersonalBdCree_Rey_BrandIdentityKit.PDF_PersonalBd
Cree_Rey_BrandIdentityKit.PDF_PersonalBd
creerey
 

Recently uploaded (20)

Affordable Stationery Printing Services in Jaipur | Navpack n Print
Affordable Stationery Printing Services in Jaipur | Navpack n PrintAffordable Stationery Printing Services in Jaipur | Navpack n Print
Affordable Stationery Printing Services in Jaipur | Navpack n Print
 
The effects of customers service quality and online reviews on customer loyal...
The effects of customers service quality and online reviews on customer loyal...The effects of customers service quality and online reviews on customer loyal...
The effects of customers service quality and online reviews on customer loyal...
 
April 2024 Nostalgia Products Newsletter
April 2024 Nostalgia Products NewsletterApril 2024 Nostalgia Products Newsletter
April 2024 Nostalgia Products Newsletter
 
Enterprise Excellence is Inclusive Excellence.pdf
Enterprise Excellence is Inclusive Excellence.pdfEnterprise Excellence is Inclusive Excellence.pdf
Enterprise Excellence is Inclusive Excellence.pdf
 
ModelingMarketingStrategiesMKS.CollumbiaUniversitypdf
ModelingMarketingStrategiesMKS.CollumbiaUniversitypdfModelingMarketingStrategiesMKS.CollumbiaUniversitypdf
ModelingMarketingStrategiesMKS.CollumbiaUniversitypdf
 
ENTREPRENEURSHIP TRAINING.ppt for graduating class (1).ppt
ENTREPRENEURSHIP TRAINING.ppt for graduating class (1).pptENTREPRENEURSHIP TRAINING.ppt for graduating class (1).ppt
ENTREPRENEURSHIP TRAINING.ppt for graduating class (1).ppt
 
CADAVER AS OUR FIRST TEACHER anatomt in your.pptx
CADAVER AS OUR FIRST TEACHER anatomt in your.pptxCADAVER AS OUR FIRST TEACHER anatomt in your.pptx
CADAVER AS OUR FIRST TEACHER anatomt in your.pptx
 
Premium MEAN Stack Development Solutions for Modern Businesses
Premium MEAN Stack Development Solutions for Modern BusinessesPremium MEAN Stack Development Solutions for Modern Businesses
Premium MEAN Stack Development Solutions for Modern Businesses
 
The-McKinsey-7S-Framework. strategic management
The-McKinsey-7S-Framework. strategic managementThe-McKinsey-7S-Framework. strategic management
The-McKinsey-7S-Framework. strategic management
 
VAT Registration Outlined In UAE: Benefits and Requirements
VAT Registration Outlined In UAE: Benefits and RequirementsVAT Registration Outlined In UAE: Benefits and Requirements
VAT Registration Outlined In UAE: Benefits and Requirements
 
amptalk_RecruitingDeck_english_2024.06.05
amptalk_RecruitingDeck_english_2024.06.05amptalk_RecruitingDeck_english_2024.06.05
amptalk_RecruitingDeck_english_2024.06.05
 
What is the TDS Return Filing Due Date for FY 2024-25.pdf
What is the TDS Return Filing Due Date for FY 2024-25.pdfWhat is the TDS Return Filing Due Date for FY 2024-25.pdf
What is the TDS Return Filing Due Date for FY 2024-25.pdf
 
Project File Report BBA 6th semester.pdf
Project File Report BBA 6th semester.pdfProject File Report BBA 6th semester.pdf
Project File Report BBA 6th semester.pdf
 
Introduction to Amazon company 111111111111
Introduction to Amazon company 111111111111Introduction to Amazon company 111111111111
Introduction to Amazon company 111111111111
 
Exploring Patterns of Connection with Social Dreaming
Exploring Patterns of Connection with Social DreamingExploring Patterns of Connection with Social Dreaming
Exploring Patterns of Connection with Social Dreaming
 
The Influence of Marketing Strategy and Market Competition on Business Perfor...
The Influence of Marketing Strategy and Market Competition on Business Perfor...The Influence of Marketing Strategy and Market Competition on Business Perfor...
The Influence of Marketing Strategy and Market Competition on Business Perfor...
 
Buy Verified PayPal Account | Buy Google 5 Star Reviews
Buy Verified PayPal Account | Buy Google 5 Star ReviewsBuy Verified PayPal Account | Buy Google 5 Star Reviews
Buy Verified PayPal Account | Buy Google 5 Star Reviews
 
anas about venice for grade 6f about venice
anas about venice for grade 6f about veniceanas about venice for grade 6f about venice
anas about venice for grade 6f about venice
 
Kseniya Leshchenko: Shared development support service model as the way to ma...
Kseniya Leshchenko: Shared development support service model as the way to ma...Kseniya Leshchenko: Shared development support service model as the way to ma...
Kseniya Leshchenko: Shared development support service model as the way to ma...
 
Cree_Rey_BrandIdentityKit.PDF_PersonalBd
Cree_Rey_BrandIdentityKit.PDF_PersonalBdCree_Rey_BrandIdentityKit.PDF_PersonalBd
Cree_Rey_BrandIdentityKit.PDF_PersonalBd
 

Difference between systematic and unsystematic risk

  • 1.
  • 3. Systematic risk, also known as "market risk" or "un-diversifiable risk", is the uncertainty inherent to the entire market or entire market segment. Also referred to as volatility, systematic risk consists of the day-to-day fluctuations in a stock's price. Types of Systematic Risk:  Interest risk  Market risk  Inflation risk
  • 4. Unsystematic risk, also known as "specific risk," "diversifiable risk" or "residual risk," is the type of uncertainty that comes with the company or industry you invest in. Unsystematic risk can be reduced through diversification Types of Unsystematic Risk:  Business risk  Financial risk
  • 5.  Systematic risk means the possibility of loss associated with the whole market or market segment. Unsystematic risk means risk associated with a particular industry or security.  Systematic risk is uncontrollable whereas the unsystematic risk is controllable.  Systematic risk arises due to macroeconomic factors. On the other hand, the unsystematic risk arises due to the micro-economic factors
  • 6.  Systematic risk affects a large number of securities in the market. Conversely, unsystematic risk affects securities of a particular company.  Systematic risk can be eliminated through several ways like hedging, asset allocation and diversification. As opposed to unsystematic risk that can be eliminated through portfolio diversification  Systematic risk is divided into three categories, i.e. Interest risk, market risk and purchasing power risk. Unlike unsystematic risk, which is divided into two broad category business risk and financial risk.