Go to the bottom of the file to see the first response
Post a total of 3 substantive responses over 2 separate days for full
participation. This includes your initial post and 2 replies to other students
or your faculty member.
Due Thursday
You are the Chief Risk Officer for a company and you’ve been tasked with
identifying the areas where your company is exposed to systematic and
unsystematic risks.
Respond to the following in a minimum of 175 words:
Based on the information you learned this week, what approach would
you take in explaining how systematic and unsystematic risks affect risk
planning?
Describe your approach.
Name 3 or more systematic or unsystematic risks your company might
face.
Think of some implications if your company decides not to be proactive
and plan for these risks.
Due Monday
Reply to at least 2 of your classmates or your faculty member. Be
constructive and professional.
Mayra Harrell
13 hours ago, at 11:13 AM
NEW
Investments are risky since there is no control of how the money is
handled. The control there is with investments is where the money is
being invested to. The approach I would take is explain thoroughly about
,systematic and unsystematic risks and how they affect risk planning.
Systematic risks are the uncontrolled investments that are being held by
companies. They are to be unpredictable and unavoidable. Unsystematic
risks are certain investments that are under particular stocks with certain
companies. My company faces systematic risk due to law changes,
interest rate hikes, and economic recessions. Due to COVID-19, there has
been little loss due to the economic recession because fortunately the
interest rates have not increased. Mortgages however have suffered
based on the lack of payments due to the spike in unemployment and
decrease in income. If the company is not proactive, the loss would be
major. Keeping the company proactive is increasing the probability of the
company and seeing a decrease in loss Work is extremely busy as
consumers are taking advantage of the very low rates.
CancelSave
Reply Edit Draft•Last edited
5/26/20, 11:13 AM
|
PROF
Cassaundra Asher
16 hours ago, at 8:32 AM
NEW
Risk planning is a strong part of any investment portfolio. Investments
themselves are risky, since an investor typically has no control over how
their money is handled, they do have control or where it goes and how
risky that investment may be. Systemic risks are those that uncontrolled
by the company holding the investments. This includes market volatility
and macroeconomic factors. Unsystematic risks are directly related to
internal companies and are a smaller scale than systemic risks. The
company I work for may face some systemic risks currently, would be how
people approach health care moving forward in the wake of covid-19.
While medical care, in general, can be considered necessary many people
are opting out of elective care. This will cost insurance companies a lot of
money. Unystemic risks include changes in our labor force, including
management. The company has already laid off 25 people, including a few
management positions. Morale is low and work is slow. We have already
began being proactive through layoffs. While it’s not ideal, it will keep the
company afloat while our medical claim count is low.
CancelSave
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5/26/20, 8:32 AM
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PROF
Veronica Alvarez
20 hours ago, at 3:54 AM
When doing some research to better under systematic and unsystematic
risk I found the following article, which I found to be interesting:
EXAMPLE OF SYSTEMATIC RISK
The Great Recession of 2008 proves to be a key example of systematic
risk. People who had invested in all kinds of securities saw the values of
their investments fall due to the market-wide economic event. The great
recession affected various securities in diverse ways. Thus, investors who
held stocks were affected in adverse ways as compared to those with
wider asset allocations.
EXAMPLE OF UNSYSTEMATIC RISK
Unsystematic risks are majorly related to errors in entrepreneurial
judgment. For example, a technology corporation might undertake market
research and expect a rise in demand for smaller cell phones and digital
watches in the coming year. For that, production lines are altered and
capital is dedicated toward smaller devices.
However, the company realizes in the next year that consumers are more
inclined towards bigger phones and watches. Thus, the inventory and
machinery obtained by the company later sells at a major loss or remains
unsold. This will, in turn, harm the stock prices of the company. Thus, all
the other firms in the technology sector might perform well while this
company will backtrack due to poor entrepreneurial foresight.
https://efinancemanagement.com/investment-decisions/systematic-vs-
unsystematic-risks
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Reply Edit Draft•Last edited
5/26/20, 3:54 AM
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PROF
Amanda King
5/25/20, 10:27 AM
The approach that I would take in explaining how systematic and
unsystematic risks affect risk planning are making sure that I explain to
my team how each could effect the company. Systematic risks are not just
going to effect our business but they are going to affect the market as a
whole. These types of risks are unpredictable and can be seen as an
unavoidable risk to be taken. Sometimes when a company is beginning to
roll out a new product, for instance, then their competing company could
try and do the same thing. This could be classified as a systematic risk for
the competing company. Unsystematic risks are usually in connection
, with an investment or companies stock. These types of risks can be better
known as diversifiable risks. Some of the risks that can be associated with
unsystematic could be regulation changes, new companies entering the
market or even recalls. As an example, we have seen when car companies
recall some of their vehicles due to mechanical errors. This is classified as
an unsystematic risk as this type of risk is only going to affect the car
industry and not multiple industries.
CancelSave
Reply Edit Draft•Last edited
5/25/20, 10:27 AM
| Show Replies (6) NEW
PROF
Kasmirah Jones
5/25/20, 8:11 AM
NEW
Systematic risk is inherent to the market as a whole not just a particular
stock or industry. Systematic risks are unpredictable and they are looked
at as being an unavoidable risk. To help manage systematic risk investors
should make sure their portfolios include a variety of assets classes, such
as fixed income, cash, real estate because each will react differently if
there is a major systematic change. Three systematic risks that could
affect a business are, changes to laws, tax reforms, and interest rate
hikes. Unsystematic risk are risks associated with a particular investment
such as a company’s stock. Unsystematic risk can re lessened through
diversification and is known as diversifiable risk. Once diversified investors
are still subject to market-wide systematic risk. Three examples of
unsystematic risk are, a change in regulations that impacts one industry,
a new competing company entering the market, and if a company is
forced to recall one of its products.
Reference:
https://www.investopedia.com/terms/s/systematicrisk.asp
https://www.netcials.com/investment-guide/9-examples-systematic-risks/
https://www.accountingtools.com/articles/unsystematic-risk.html
CancelSave
Reply Edit Draft•Last edited
5/25/20, 8:11 AM
| Show Replies (2) NEW
PROF
Joseph Mc Donald
5/24/20, 6:44 PM
NEW
Week 5 Day 6 - Raise Capital on Your Own Terms : How to Fund Your Business Without
Selling Your Soul
Post a total of 3 substantive responses over 2 separate days for full
participation. This includes your initial post and 2 replies to other students
or your faculty member.
Due Thursday
You are the Chief Risk Officer for a company and you’ve been tasked with
identifying the areas where your company is exposed to systematic and
unsystematic risks.
Respond to the following in a minimum of 175 words:
Based on the information you learned this week, what approach would
you take in explaining how systematic and unsystematic risks affect risk
planning?
Describe your approach.
Name 3 or more systematic or unsystematic risks your company might
face.
Think of some implications if your company decides not to be proactive
and plan for these risks.
Due Monday
Reply to at least 2 of your classmates or your faculty member. Be
constructive and professional.
Mayra Harrell
13 hours ago, at 11:13 AM
NEW
Investments are risky since there is no control of how the money is
handled. The control there is with investments is where the money is
being invested to. The approach I would take is explain thoroughly about
,systematic and unsystematic risks and how they affect risk planning.
Systematic risks are the uncontrolled investments that are being held by
companies. They are to be unpredictable and unavoidable. Unsystematic
risks are certain investments that are under particular stocks with certain
companies. My company faces systematic risk due to law changes,
interest rate hikes, and economic recessions. Due to COVID-19, there has
been little loss due to the economic recession because fortunately the
interest rates have not increased. Mortgages however have suffered
based on the lack of payments due to the spike in unemployment and
decrease in income. If the company is not proactive, the loss would be
major. Keeping the company proactive is increasing the probability of the
company and seeing a decrease in loss Work is extremely busy as
consumers are taking advantage of the very low rates.
CancelSave
Reply Edit Draft•Last edited
5/26/20, 11:13 AM
|
PROF
Cassaundra Asher
16 hours ago, at 8:32 AM
NEW
Risk planning is a strong part of any investment portfolio. Investments
themselves are risky, since an investor typically has no control over how
their money is handled, they do have control or where it goes and how
risky that investment may be. Systemic risks are those that uncontrolled
by the company holding the investments. This includes market volatility
and macroeconomic factors. Unsystematic risks are directly related to
internal companies and are a smaller scale than systemic risks. The
company I work for may face some systemic risks currently, would be how
people approach health care moving forward in the wake of covid-19.
While medical care, in general, can be considered necessary many people
are opting out of elective care. This will cost insurance companies a lot of
money. Unystemic risks include changes in our labor force, including
management. The company has already laid off 25 people, including a few
management positions. Morale is low and work is slow. We have already
began being proactive through layoffs. While it’s not ideal, it will keep the
company afloat while our medical claim count is low.
CancelSave
Reply Edit Draft•Last edited
5/26/20, 8:32 AM
| Hide Replies (2) NEW
, Save DraftCancelReply
PROF
Veronica Alvarez
20 hours ago, at 3:54 AM
When doing some research to better under systematic and unsystematic
risk I found the following article, which I found to be interesting:
EXAMPLE OF SYSTEMATIC RISK
The Great Recession of 2008 proves to be a key example of systematic
risk. People who had invested in all kinds of securities saw the values of
their investments fall due to the market-wide economic event. The great
recession affected various securities in diverse ways. Thus, investors who
held stocks were affected in adverse ways as compared to those with
wider asset allocations.
EXAMPLE OF UNSYSTEMATIC RISK
Unsystematic risks are majorly related to errors in entrepreneurial
judgment. For example, a technology corporation might undertake market
research and expect a rise in demand for smaller cell phones and digital
watches in the coming year. For that, production lines are altered and
capital is dedicated toward smaller devices.
However, the company realizes in the next year that consumers are more
inclined towards bigger phones and watches. Thus, the inventory and
machinery obtained by the company later sells at a major loss or remains
unsold. This will, in turn, harm the stock prices of the company. Thus, all
the other firms in the technology sector might perform well while this
company will backtrack due to poor entrepreneurial foresight.
https://efinancemanagement.com/investment-decisions/systematic-vs-
unsystematic-risks
CancelSave
Reply Edit Draft•Last edited
5/26/20, 3:54 AM
| Show Replies (7) NEW
PROF
Amanda King
5/25/20, 10:27 AM
The approach that I would take in explaining how systematic and
unsystematic risks affect risk planning are making sure that I explain to
my team how each could effect the company. Systematic risks are not just
going to effect our business but they are going to affect the market as a
whole. These types of risks are unpredictable and can be seen as an
unavoidable risk to be taken. Sometimes when a company is beginning to
roll out a new product, for instance, then their competing company could
try and do the same thing. This could be classified as a systematic risk for
the competing company. Unsystematic risks are usually in connection
, with an investment or companies stock. These types of risks can be better
known as diversifiable risks. Some of the risks that can be associated with
unsystematic could be regulation changes, new companies entering the
market or even recalls. As an example, we have seen when car companies
recall some of their vehicles due to mechanical errors. This is classified as
an unsystematic risk as this type of risk is only going to affect the car
industry and not multiple industries.
CancelSave
Reply Edit Draft•Last edited
5/25/20, 10:27 AM
| Show Replies (6) NEW
PROF
Kasmirah Jones
5/25/20, 8:11 AM
NEW
Systematic risk is inherent to the market as a whole not just a particular
stock or industry. Systematic risks are unpredictable and they are looked
at as being an unavoidable risk. To help manage systematic risk investors
should make sure their portfolios include a variety of assets classes, such
as fixed income, cash, real estate because each will react differently if
there is a major systematic change. Three systematic risks that could
affect a business are, changes to laws, tax reforms, and interest rate
hikes. Unsystematic risk are risks associated with a particular investment
such as a company’s stock. Unsystematic risk can re lessened through
diversification and is known as diversifiable risk. Once diversified investors
are still subject to market-wide systematic risk. Three examples of
unsystematic risk are, a change in regulations that impacts one industry,
a new competing company entering the market, and if a company is
forced to recall one of its products.
Reference:
https://www.investopedia.com/terms/s/systematicrisk.asp
https://www.netcials.com/investment-guide/9-examples-systematic-risks/
https://www.accountingtools.com/articles/unsystematic-risk.html
CancelSave
Reply Edit Draft•Last edited
5/25/20, 8:11 AM
| Show Replies (2) NEW
PROF
Joseph Mc Donald
5/24/20, 6:44 PM
NEW
Week 5 Day 6 - Raise Capital on Your Own Terms : How to Fund Your Business Without
Selling Your Soul
