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Alok

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Definition of 'Systematic Risk'
The risk inherent to the entire market or entire market segment.

Also known as "un-diversifiable risk" or "market risk."

Interest rates, recession and wars all represent sources of systematic risk because they affect the entire market and cannot be avoided through diversification. Whereas this type of risk affects a broad range of securities, unsystematic risk affects a very specific group of securities or an individual security. Systematic risk can be mitigated only by being hedged.

Even a portfolio of well-diversified assets cannot escape all risk.
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Definition of 'Unsystematic Risk'
Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through appropriate diversification.

Also known as "specific risk," "diversifiable risk" or "residual risk."

Read more: http://www.investopedia.com/terms/u/unsystematicrisk.asp#ixzz2BkJfp9Ns

For example, news that is specific to a small number of stocks, such as a sudden strike by the employees of a company you have shares in, is considered to be unsystematic risk.
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Numeric Investors is a Portfolio Fund Management Company, located in Cambridge Mass.
Lang Wheeler is Numeric's founder and C.E.O. His partners are John Bogle and Mark Engerman.
Numeric Investors was founded in 1989 by Langdon Wheeler, who had developed the original version of the firm's earnings estimate revision model. This case study is about computer modeling of companies financial information and stock market pricing. Lang had studied the effect of analyst's earnings estimates on the stock prices of 300 companies. The analysis and ideas he gained from this exercise would eventually become Numeric's

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