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Systematic risk |
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Systematic riskAlso called undiversifiable risk or market risk.Systematic risk Similar MatchesNonsystematic riskNonsystematic riskNonmarket or firm-specific risk factors that can be eliminated by diversification. Also called unique risk or diversifiable risk. Systematic risk refers to risk factors common to the entire economy. Systematic ReturnSystematic ReturnThe part of the return dependent on the benchmark return. We can break excess returns into two components: systematic and residual. The systematic return is the beta times the benchmark excess return. Systematic risk principleSystematic risk principleOnly the systematic portion of risk matters in large, well-diversified portfolios. Thus, expected returns must be related only to systematic risks. Unsystematic riskUnsystematic riskAlso called the diversifiable risk or residual risk. The risk that is unique to a company such as a strike, the outcome of unfavorable litigation, or a natural catastrophe that can be eliminated through diversification. Related: Systematic risk. Systematic withdrawal planSystematic withdrawal planA provision of certain mutual funds to pay out to the shareholder specified amounts after specified periods of time. Further SuggestionsSystematicSystematic investment plan |
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