Determine whether the following is Systemic/Unsystemic risk, and whether it would increase/decrease or not change the...

Determine whether the following is Systemic/Unsystemic risk, and whether it would increase/decrease or not change the market

62. Oil price hit an all time high

63. Ford expected to lay off 1,000 workers at a michigan plant

64. Trumps exit from Iran stops 40 Billion in orders to Airbus/Boeing

65. 5 more Nike executives out amid Harassment allegations

Solutions

Expert Solution

SYSTEMATIC RISK IS THE RISK WHICH IS APPLICABLE TO WHOLE MARKET AS A WHOLE.

UNSYSTEMATIC RISK IS THE RISK WHICH IS FIRM SPECIFIC AND IT AFFECTS THE FIRM ONLY

62> OIL PRICE HIT AN ALL TIME HIGH : IS SYSTEMATIC RISK AS IT AFFECTS THE ECONOMIC GROWTH OF THE COUNTRY AND SO OVERALL MARKET. AND OLI PRICE RISE IS AN ADVERSE ELEMENT FOR MARKET SO IT WILL DECREASE MARKET

63>FORD EXPECTED TO LAY OFF 1000 WORKERS AT MICHIGAN PLANT : THIS WILL SPECIFICALLY AFFECT THE FORD COMPANY ANT NOT THE MARKET. SO IT IS AN EXAMPLE OF UNSYSTEMATIC RISK AND DOES NOT AFFECT THE MARKET, SO NO CHANGE IN MARKET

64> TRUMPS EXIT FROM IRAN STOPS 40 BILLION IN ORDERS TO AIRBUS/BOEING. THIS IS AGAIN AN EXAMPLE OF UNSYSTEMATIC RISK AS IT IS FIRM SPECIFIC. SO IT WILL NOT CHANGE MARKET

65> 5 MORE NIKE EXECUTIVES OUT AMID HARASSMENT ALLEGATIONS. IT IS AGAIN AN EXAMPLE OF FIRM SPECIFIC SO IT WILL NOT AFFECT THE MARKET. SO NO CHANGE IN THE MARKET

jeff jeffy answered 1 year ago

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