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What are the two components of total risk? Which component is part of the risk-return relationship?...

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Finance

What are the two components of total risk? Which component ispart of the risk-return relationship? Why?

(Please thoroughly explain the the 2 components firm-specificrisk and market risk. )

Answer & Explanation Solved by verified expert
3.9 Ratings (491 Votes)
Firm specific risk is also called as unsystematic risk This is a risk which is uniquely present for a firm or an organization Eg Litigation labour strikes etc This kind of risk can be eliminated    See Answer
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What are the two components of total risk? Which component ispart of the risk-return relationship? Why?(Please thoroughly explain the the 2 components firm-specificrisk and market risk. )

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