Bodie Marcus INVESTMENTS Fourth Edition Components of risk a Market or systematic risk: risk related to the macro economic factor or market index a Unsystematic or firm specific risk: risk not related to the macro factor or market index a Total risk- Systematic t Unsystematic Irwvin/McGrazo-Hill 10-8 The McGraw-Hill Companies, Inc, 1999Irwin/McGraw-Hill 10-8 © The McGraw-Hill Companies, Inc., 1999 INVESTMENTS Fourth Edition Bodie Kane Marcus „ Market or systematic risk: risk related to the macro economic factor or market index „ Unsystematic or firm specific risk: risk not related to the macro factor or market index „ Total risk = Systematic + Unsystematic Components of Risk Components of Risk