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  • Presentation On Risk Analysis: by - Aishwarya Singh-PGDM (IT)

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    This presentation defines risk as the probability of low returns compared to expected returns. It notes that all investments carry some degree of risk. The causes of risk include wrong investment decisions, timing, creditworthiness, maturity period, amount invested, and nature of the industry. Risk is broadly classified into systematic and unsystematic risks. Systematic risks, also called non-diversifiable risks, are inherent in most investments and beyond an investor's control. Unsystematic risks are unique to individual firms and industries and can potentially be mitigated through diversification. Systematic risks include inflation, interest rates, politics, markets, and government policies. Unsystematic risks include business and financial risks.

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    This presentation defines risk as the probability of low returns compared to expected returns. It notes that all investments carry some degree of risk. The causes of risk include wrong investment decisions, timing, creditworthiness, maturity period, amount invested, and nature of the industry. Risk is broadly classified into systematic and unsystematic risks. Systematic risks, also called non-diversifiable risks, are inherent in most investments and beyond an investor's control. Unsystematic risks are unique to individual firms and industries and can potentially be mitigated through diversification. Systematic risks include inflation, interest rates, politics, markets, and government policies. Unsystematic risks include business and financial risks.

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    11 views8 pages

    Presentation On Risk Analysis: by - Aishwarya Singh-PGDM (IT)

    Uploaded by

    Aishwarya Singh
    This presentation defines risk as the probability of low returns compared to expected returns. It notes that all investments carry some degree of risk. The causes of risk include wrong investment decisions, timing, creditworthiness, maturity period, amount invested, and nature of the industry. Risk is broadly classified into systematic and unsystematic risks. Systematic risks, also called non-diversifiable risks, are inherent in most investments and beyond an investor's control. Unsystematic risks are unique to individual firms and industries and can potentially be mitigated through diversification. Systematic risks include inflation, interest rates, politics, markets, and government policies. Unsystematic risks include business and financial risks.

    Copyright:

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    Download as PPT, PDF, TXT or read online from Scribd
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    of 8

    Presentation on Risk Analysis

    by - Aishwarya Singh-PGDM(IT)

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    Page 1

    What is Risk ?
    RISK means the probability of having low returns
    as compared to the expected returns. All investment activities are subject to risk. Even the government

    securities are not free from risk.

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    Page 2

    CAUSES OF RISKS.
    1. Wrong decision of what to invest in. 2. Wrong timing of investment. 3. Creditworthiness of issuer. 4. Maturity period or the length of investment.

    5. Amount of investment.
    6. Nature of the industry or business in which the company is operating.

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    Page 3

    Risk is broadly classified into two types:


    1. Systematic Risks.

    2. Unsystematic Risks.

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    Page 4

    1. SYSTEMATIC RISK.

    Also termed as non-diversifiable risk.


    It is inherited in almost all the investment avenues. It is beyond the control of investors and cannot be

    mitigated to large extent.


    It cannot be avoided and market does compensate for taking exposure to such risks.

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    Page 5

    SYSTEMATIC RISK IS FURTHER SUBDIVIDED INTO 3 TYPES:


    1. Inflation risk 2. Interest rate risk. 3. Political Risk. 4. Market Risk. 5. Risk due to govt. policies. 6. Natural Calamities 7. Scams/Malpractices.

    8. Monsoon.
    9. Industrial Growth or Output 10.International Events
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    2. UNSYSTEMATIC RISK.

    Also termed as diversifiable risk. Unique and peculiar to a firm and industry. These risks can be mitigated. Can be controlled.

    Can be avoided and the market does not compensate for taking
    such risks.

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    Page 7

    UNSYSTEMATIC RISK IS FURTHER SUBDIVIDED INTO 3 TYPES:


    1. Business risk.

    2. Financial risk.

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    Page 8

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