Sec.3 - Ch.4: Types of Investment Risk & Concepts Flashcards
1
Q
What is risk?
A
The uncertainty that the realized return will not equal the expected return
2
Q
What is Systematic Risk?
A
It’s non-diversifiable risk
- It is the risk that is associated with investing in the market and is unavoidable
3
Q
What are the 5 types of systematic risk? Think PRIME
A
Purchasing Power, Reinvestment Rate, Interest Rate, Market, Exchange Rate
