Systematic risk, Risk Management

Systematic Risk

Systematic risk is any risk which affects the value of a huge number of assets; therefore, each asset will have a various degree of sensitivity to the underlying risk. In financial markets, if investors maintain large, well-diversified portfolios, then asset prices will be affected only by this kind of risk. Higher systematic risk will increase an investor's expected returns. Therefore, systematic risk cannot be diversified away.

Posted Date: 10/16/2012 7:07:43 AM | Location : United States







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