TOTAL VS. SYSTEMATIC RISK • Consider the following information: Standard              Deviation               Beta Security C                 20%                  1.25 Security K                 30%                  0.95 • Which security has more total risk? • Which security has more systematic risk? • Which security should have the higher expected return?

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A: Risk measures can be used  to perform  risk assessment.

Q: Current Attempt in Progress Define systematic risk. BIU T₂ T² I lil Iml bd E lod 3 99

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Classification Of Risk

Risk means when there could be a possibility that the returns expected from a particular project or investment may or may not match the investor's expectations. In other words, the uncertainty of an income arising from a source that would either be lower than expected or result in losses in risk exposure of the project. The higher the risk involved, the higher is the return expected by the investor as the investor is exposed to a high level of risk. There are various methods by which different types of risk can be assessed and avoided or mitigated.