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

70.2K

Verified Solution

Question

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
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

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. )

Other questions asked by students