LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Please answer this question

shobha (others) (50 Points)

05 March 2012

distinguish between systematic and unsystematic risk with suitable examples

Reply
Follow
Share

2 Replies

Jitendra Vyas (Commercial Officer) (178 Points)
Replied 05 March 2012

Systematic Risk :-

Means those risks which are faced in past by management .

Example like a) Risk of decline in sales

b) Risk of important and key employee can left organisation.

And any other risk which was faced by management in past and for which management have some plan and some procedures.

Unsystematic Risk :-

Means unexpected risk which is not faced by management in past and management have no experience for that type of risk and management have no plan and procedures for resolving that type of risks.

Example :- a ) Risks of force measures

b) Risks of change in state policy which was not been expected.

Any other risk which is not expected is considered as unsystematic risk.

sidhu (Tax consultant) (70 Points)
Replied 26 December 2014

Systematic Risk is the Risk that cannot be removed (or) avoided- Sys Risk is due to Macro Economic Factors Ex- Non availability of Cotton due to textile industry due to heavy floods will reduce the profitability and market rate of the share of EVERY Textile industry.

Unsystematic Risk is the risk that is avoidable- Unsys Risk is due to companies performance or Ineffeciency. Ex- companies non availability of Funds or Inability to control Wastage or Idle Wages eats away the profits made and thus reduces the profit and market price per share of the company.