Explaining Systematic and Unsystematic Risks in Risk Planning
As the chief risk officer for my company, I would take a two-pronged approach in explaining how systematic and unsystematic risks affect risk planning (Financial Times Guide to Risk, 2019). Firstly, it is important to understand the difference between the two types of risks. Systematic risk refers to “risks that affect an entire market, or the entire economy,” such as changes in interest rates or political instability (Financial Times Guide to Risk, 2019). These risks are often beyond the control of an individual company, and are generally diversifiable through portfolio diversification. On the other hand, unsystematic risk refers to “risks that are specific to a particular company or industry,” such as a product recall or a lawsuit (Financial Times Guide to Risk, 2019). These risks are often specific to a particular company or industry, and are not diversifiable through portfolio diversification. In explaining the impact of these two types of risks on risk planning, it is important to emphasize the importance of proactive risk management in mitigating the potential negative impacts of both types of risks (KPMG, 2019). By proactively identifying and analyzing potential risks, companies can develop strategies to mitigate or transfer the risks, such as purchasing insurance or implementing risk control measures (Ernst & Young, 2020). Three examples of systematic risks that my company might face include changes in economic conditions, changes in interest rates, and changes in exchange rates (Ernst & Young, 2020). Three examples of unsystematic risks that my company might face include product recalls, lawsuits, and operational disruptions (KPMG, 2019). Cont…
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more