The second desired attribute is a fund manager's ability to rid a securities portfolio of all unnecessary unsystematic risks
by virtue of diversification.
Total, Systematic, and Unsystematic Risks
and Ownership Structure
Second, the paper demonstrates, for the first time, the application of the classic CAPM notion of systematic and unsystematic risks
to regional economic growth and related location decisions.
Thus, diversification as used in this paper is relevant to the concept of minimising the systematic and unsystematic risks
within real estate investment market.
Such unsystematic risks
can cause serious cash flows and profit collapses.
Harrigan (1984) points out some possible causes of such increased unsystematic risks
such as higher exit barriers and risk of excess capacity.
The fictional diversified shareholder concept is also more complete than the fictional undiversified shareholder concept in that it implies that the shareholders are risk-neutral with regard to the unsystematic risks
posed by various corporate investments, although it does also have some indeterminacy in that it does not specify any particular shareholder attitude towards systematic risk.
10) From the investors' standpoint, insurable risks are firm-specific, unsystematic risks
that can be eliminated by maintaining a well-diversified
These unsystematic risks
are diversifiable by holding a larger portfolio of several media properties, although most public programs have been directed toward a single property purchase.
This decomposition of |Delta~TRSK indicates that decreases in banks' total risks subsequent to announcements of foreign lending agreements are primarily due to decreases in the banks' unsystematic risks
The distinction between systematic and unsystematic risks
is generally recognized.
The unsystematic risks
associated with such mishaps as lawsuits, strikes, successful and unsuccessful takeovers, poor marketing plans and bad management in a single firm can be eliminated through diversification.