What is unsystematic risks, Financial Management

Assignment Help:

Q. What is Unsystematic Risks?

Unsystematic Risks stems from a managerial inefficiency, technological change in the production process, availability of raw material, changes in the consumer preference, and labor problems. The nature and magnitude of the above mentioned factors differ from industry to industry, and company to company. They have to be analyzed separately for each industry and firm. The changes in the consumer preference affect the consumer products like television sets, washing machines, refrigerators, etc. more than they affect the iron and steel industry. Technological changes affect the information technology industry more than that of consumer product industry. Thus, it differs from industry to industry. Financial leverage of the companies that is debt-equity portion of the companies differs from each other. The nature and mode of raising finance and paying back the loans involve a risk element. All these factors form the unsystematic risk and contribute a portion in the total variability of the return. Broadly, unsystematic risk can be classified into) Business risk ii) Financial risk


Related Discussions:- What is unsystematic risks

Lockbox system, how do we compute for benefits can derrive out of using loc...

how do we compute for benefits can derrive out of using lockbox system?

Example on modigliani and miller approach, Q. Example On modigliani and mil...

Q. Example On modigliani and miller approach? The subsequent is the data regarding two companies X and Y belonging to the same risk class: Company X

Interpretations of long term solvency or liquidity ratio''s, Long Term Solv...

Long Term Solvency or Liquidity Ratio's   DE:          The Debt Equity ratio exhibits the relation that exists between debt and proprietor's fund and is considered a very im

Estimate incremental cash flows, You just recently joined Manawatu Blinds a...

You just recently joined Manawatu Blinds and Curtains (MBC) group, a partnership firm based in Manawatu region providing windows, dressings, and installations to both commercial an

Cost of preference equity-irr , 1.  Find out the present value of Rs. 10,00...

1.  Find out the present value of Rs. 10,000 to be required after 4 years if the interest rate is 6%. 2.  A Firm can invest Rs. 10,000 in a project with a life of three years.

Explain factoring and term loan financing, A factoring company has offered ...

A factoring company has offered a one-year agreement with Glub Ltd to both manage its debtors and advanced 80 per cent of the value of all its invoices immediately a sale is invoi

Gold standard, what is the traditional gold standard? and how does it diffe...

what is the traditional gold standard? and how does it differ from our current monetary system.

Student, applicability of an operating cycle in vegetable growing in uganda...

applicability of an operating cycle in vegetable growing in uganda

Impact of the yield level in bonds, Different bonds trade at differen...

Different bonds trade at different yields though the coupon rate, maturity, and embedded options are same for them. Assuming that all the other bond characteristi

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd