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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
Explain the significance of the term additional funds needed . When the pro forma balance sheet is finished, total liabilities and total assets and equity will rarely match.
In indexed bonds, the principal and coupon payments are linked to the market index like inflation and price index. Index bonds are attractive to investors
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Let us construct a binomial interest rate tree for a 5.5% option free bond taking Table 3 as the binomial interest rate tree. Table 1 shows the various values in
There are some misconceptions about securitization: Poor quality originators end up in securitizing their assets. A bank's best mortgage
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A developer has purchased a commercial office site in Melbourne and wishes to develop a building which will be sold to an institutional owner before completion of the building.
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