ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Unsystematic risk is the risk that is unique to a specific company or industry. It’s also known as nonsystematic risk, specific risk, diversifiable risk, or residual risk.

Detailed explanation-2: -Specific risk is unique to the asset and independent from one property to another and hence is a risk which, when combined with other assets in a portfolio, can be diversified away. The primary concern of the investor, therefore, is to have enough assets in the portfolio to diversify away much of this specific risk.

Detailed explanation-3: -Unsystematic risk is also known as specific risk, meaning the dangers that are unique to a single company or industry. However, these risks do not only occur one firm at a time.

Detailed explanation-4: -Specific risk is also referred to as unsystematic risk or diversifiable risk.

Detailed explanation-5: -Unsystematic risk is a hazard that is specific to a business or industry. The presence of unsystematic risk means that the owner of a company’s securities is at risk of adverse changes in the value of those securities because of the risk associated with that organization.