BETONIO, Mary Bernadette Joyce B.

September 25, 2014

FINSUMA K31 HW 4

Define the different kinds of risk and give examples.

1. Dynamic vs Static
Dynamic – involves risk arising from environmental changes (ex: people’s choice,
lifestyle)
Static – risk that does not change over time and not effected by business environment (ex:
selling and buying real property)
2. Particular vs Fundamental
Particular – risk that affects particular event (ex: estafa)
Fundamental – involves risk that affects the whole of a company or a group (ex: natural
and social calamities)
3. Financial vs Non- Financial
Financial – risk that affects the financial performance, hence, the profit and return of a
company (ex: implementation of financing method)
Non-Financial – risk that does not directly affects the financial performance but the
operation of a company (ex:
4. Diversifiable vs Non- Diversifiable
Diversifiable – risk in investments that are affected by the diversified portfolio (ex:
investment with non-market risk)
Non-Diversifiable – risk in asset investments that are not affected by the diversified
portfolio (ex: investment with market risk)