Clarify the difference between systematic and unsystematic risk
What will be an ideal response?
Answer: Systematic risk is that portion of a security's risk or variability that cannot be eliminated through investor diversification, in other words, that is part of the entire market system. (This explanation might help student remember what is "systematic."). This type of variability or risk results from factors that affect all securities. Unsystematic risk is the risk or variability that can be eliminated through investor diversification. Unsystematic risk results from factors that are unique to a particular firm.
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A researcher collected data by conducting surveys in two cities - Los Angeles and New York. After the primary data had been collected, and before moving to the next step of data analysis, the researcher must perform all of the following activities, EXCEPT:
a. interpret data to create knowledge. b. assign numerical descriptors to all response categories. c. enter data from the Los Angeles survey into the database. d. enter data from the New York survey into the database. e. examine data for coding and data-entry error.
It is a standard brokerage practice to recommend that buyers of residential property have
A) a property inspection B) an accountant view the property before they buy it C) the property torn down and then rebuild before the close of escrow to discover latent defects D) no inspections of any kind because all existing homes will have problems