GSAs with a single cohort can only pool nonsystematic risk
In other words, the objective of the study is to investigate the relationship between nonsystematic risk
and smoothed profits (high-quality and low-quality).
Thus, diversifying the production activities in a region will tend to reduce nonsystematic risk
The return on an individual housing transaction is positively associated with national returns, but the association is not strong, which indicates a high level of nonsystematic risk
in housing transactions.
This does not require that the nonsystematic risk
be identical for all companies.
Another example of nonsystematic risk
would be loan-type risks, such as high loan-to-value ratios or investor loans.
Comparability, or lack thereof, is a function of the similarity of the historical returns of the practice and the nonsystematic risk
features of the practice -- as compared to the same elements for the sample transactional firms.
14) To investigate this explanation, we compare systematic risk (Beta) and nonsystematic risk
(IdioRisk) for the demutualized insurers and the regular insurance IPO insurers.
Researchers and investors have found that a major benefit of investing in indices is the diversification effect which reduces dispersion or nonsystematic risk
At one level, general and specific market risk are analogous to systematic and nonsystematic risk
in a standard asset-pricing framework.
According to Doherty, although only systematic risk impacts the required return to equity, nonsystematic risk
increases the probability of insolvency and thus imposes real costs on bondholders.
1994), whether insider ownership has a differential relation to systematic versus nonsystematic risk
is an empirical question.