Respond to the following in a minimum of 175 words
Business risk is typically described as the exposure a company or organization has to a number of factors that may lower the company’s profits, which may trigger a business failure. Although there are many business risks, two major risk categories are systematic risks and unsystematic risks.
- Explain the differences between systematic risks and unsystematic risks.
- Briefly discuss two sources of systematic risks and two sources of unsystematic risks.
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Discussion
Businesses are faced by different types of risks. These risks have the potential to affect the sustainability of the operations of the company and thereby need to be mitigated. There are two major types of risks including systematic and unsystematic risks. Systematic risks are risks that affect the whole economy or market that a company operates in. On the other hand, unsystematic risks refer to risks that affect a particular industry within a given economy (Bhasin, 2013). There are several differences between these two types of risks.
(328 words)