Explain differences between systematic and unsystematic risk

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Reference no: EM133525493

Assignment: Module Case Study Guidelines

Overview

People should understand the impact of different types of risk on financial health, whether they're dealing with personal or corporate finances. The risks for personal finance often only affect individuals and families. These risks come up, for example, when deciding whether you can afford to buy a house or invest in stocks. Financial risks for businesses often affect multiple people throughout the entire company. This includes individuals who do not work in the finance department. When businesses make finance-related decisions, it's important that they know how their decisions affect all parts of their company.

Directions

Go to McDonald's ("the company") Financial Information webpage.

Under SEC Filings, locate and download the quarterly report (Form 10-Q) with the most recent Filing Date. Then write a response.

Specifically, you must address the following criteria:

I. Systematic and Unsystematic Risk: Explain the differences between systematic and unsystematic risk.

II. Financial Risks: Describe the potential impacts of the following types of financial risk on the company based on the quarterly report:

1. Interest rate risk
2. Economic risk
3. Credit risk
4. Operational risk

III. Lower Growth Impact: Explain the impact that a lower growth in sales could have on the dividend policy and retained earnings for the company based on the quarterly report.

IV. Higher Growth Impact: Explain the impact that a higher growth in sales could have on the dividend policy and retained earnings for the company based on the quarterly report.

Reference no: EM133525493

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