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

How are libor, Q. How are LIBOR, TIBOR and EURIBOR determined? London I...

Q. How are LIBOR, TIBOR and EURIBOR determined? London Inter Bank Offered rate ( LIBOR) and is the rate of interest at which banks offer funds to other banks in marketable siz

Apv capital budgeting framework helpful for foreign capital, What makes the...

What makes the APV capital budgeting framework helpful for analyzing foreign capital expenditures? The APV framework is a value- additivity method. As international projects fr

Characteristics of a stock exchange, Characteristics of a Stock Exchange ...

Characteristics of a Stock Exchange The requirements for a stock exchange to act as a platform for buying and selling securities is dependant upon the trading prerequisites. Som

State the economic conditions of cost of capital, State the economic condit...

State the economic conditions of cost of capital General economic conditions These include demand for and supply of capital within the economy and level of expected inflatio

Standard deviation, Standard Deviation An investment must be evaluated ...

Standard Deviation An investment must be evaluated on two dimensions - rate of return and risk. An investor cannot enjoy a high return without any exposure to risk.  The higher

Core Concepts, Do you have Textbook solutions for Financial Management Core...

Do you have Textbook solutions for Financial Management Core Concepts Author: Raymond M. Brooks. ISBN 978-0-13-267103-3.

Hedging using commodity futures, Hedging Using Commodity Futures Produc...

Hedging Using Commodity Futures Producers of agricultural commodities are faced with price risk and production risk over a period of time and within a marketing year. In case o

Yield spread measures for floating-rate securities, In a floating rat...

In a floating rate security, the coupon rate changes periodically as per the reference rate. The yield to maturity of floating rate securities cannot be calculated as

How do we calculate the payback period, How do we calculate the payback per...

How do we calculate the payback period for a proposed capital budgeting project? What are the major criticisms of the payback method? We compute the payback period for a proposed

Explain and derive the international fisher effect, Explain and derive the ...

Explain and derive the international Fisher effect. Answer:  The international Fisher effect can be acquired by combining the Fisher effect and the relative version of purchasi

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