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Explain the Difference Between Systematic and Unsystematic Risk

question 92

Essay

Explain the difference between systematic and unsystematic risk.Also explain why one of these types of risks is rewarded with a risk premium while the other type is not.


Definitions:

Reward Distribution

The process of allocating incentives and compensations to employees based on their performance, contribution, or position within an organization.

Participatory Planning

A process where stakeholders or employees are actively involved in the planning of projects or organizational changes, ensuring inclusion and diverse input towards decision-making.

Software Engineers

Professionals who apply principles of software engineering to design, develop, maintain, test, and evaluate computer software.

IT Firm

An IT firm is a company that provides information technology services, such as software development, technical support, and IT consultancy.

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