An analyst is reviewing a portfolio containing debt securities issued by a regional logistics carrier alongside long-term U.S. Treasury bonds. The analyst is evaluating the portfolio's exposure to non-systematic and credit risks. Which of the following statements regarding these risks are correct?
- The risk that the logistics carrier defaults on its interest or principal payments is a form of non-systematic risk that can be minimized through diversification.Cevap
- Business risk and financial risk specific to a single corporate issuer are categorized as non-systematic risks.Cevap
- CA drop in the market price of the U.S. Treasury bonds driven by rising macroeconomic interest rates is classified as credit risk.
- DRestricting corporate bond holdings exclusively to investment-grade securities eliminates credit risk from a fixed-income portfolio.
Cevap
Credit risk is a non-systematic risk specific to an issuer that can be reduced via diversification, and business/financial risks tied to a single issuer fall into the non-systematic risk category.
Non-systematic risk refers to issuer-specific vulnerabilities such as credit default, business operations, and financial structure. Because these factors apply to isolated firms, holding a diversified mix of issuers across multiple sectors reduces the portfolio's overall non-systematic risk.
Adım Adım Çözüm
Anahtar Kavram
Non-systematic risks, including credit, default, business, and financial risks, are unique to individual issuers and can be mitigated through asset diversification.