systematic risk


systematic risk
= residual risk
The element of risk in a portfolio of investments that cannot be reduced by diversification, because it is common to all securities of the same general class. The compensation that an investor requires for undertaking such risks forms the basis for the risk premium calculation of the capital asset pricing model and arbitrage pricing theory Systematic risk is measured by the beta coefficient Compare specific risk

Big dictionary of business and management. 2014.

Look at other dictionaries:

  • systematic risk — The risk affecting a market in general; for example, if the government s monetary and fiscal policies create inflation, price levels rise, affecting the entire market in much the same way, thus creating a systematic risk. Stock index futures can… …   Financial and business terms

  • Systematic risk — Also called undiversifiable risk or market risk, the minimum level of risk that can be obtained for a portfolio by means of diversification across a large number of randomly chosen assets. Related: unsystematic risk. The New York Times Financial… …   Financial and business terms

  • Systematic Risk — The risk inherent to the entire market or entire market segment. Also known as un diversifiable risk or market risk. Interest rates, recession and wars all represent sources of systematic risk because they affect the entire market and cannot be… …   Investment dictionary

  • systematic risk — sistemos rizika statusas T sritis turto vertinimas apibrėžtis Rizika, daranti poveikį visai rinkai, o ne tik atskiriems jos dalyviams ar turtui. Sistemos rizika negali būti skaidoma. atitikmenys: angl. systematic risk ryšiai: sinonimas – rinkos… …   Lithuanian dictionary (lietuvių žodynas)

  • systematic risk — noun The risk associated with an asset that is correlated with the risk of asset markets generally, often measured as its beta. Syn: market risk …   Wiktionary

  • systematic risk — The part of an asset’s risk that cannot be eliminated through *diversification. This type of risk can be measured by a *beta coefficient …   Auditor's dictionary

  • Systematic risk principle — Only the systematic portion of risk matters in large, well diversified portfolios. The, expected returns must be related only to systematic risks. The New York Times Financial Glossary …   Financial and business terms

  • systematic risk principle — Only the systematic portion of risk matters in large, well diversified ( diversification) portfolios. Thus, expected returns must be related only to systematic risks . Bloomberg Financial Dictionary …   Financial and business terms

  • non-systematic risk — See specific risk …   Big dictionary of business and management

  • risk — (1) Noun The possibility of loss. (2) Noun The uncertainty of whether events, expected or otherwise, will have an adverse impact. In this context, the adverse impact is usually a quantity of return ( income) or value at risk. (3) Noun the… …   Financial and business terms