Question: What is Risk?
Answer:. Risk is the uncertainty of future outcome.
Question: What is Credit Risk ?
Answer:
The risk of loss of principal or loss of a financial reward stemming from a borrower's failure to repay a loan or otherwise meet a contractual obligation.
Question: What is Systematic risk ?
Answer:
The portion of an individual’s asset’s total variance i.e., the attributable to the variability of the total market portfolio.
Question: What is Unsystematic risk ?
Answer:
Ø Individual assets have variance i.e., not related to the market portfolio due to unique features.
Ø It is eliminated by diversified portfolio.
Question: What is Security?
Answer:
Security means things deposited as a guarantee of undertaking for loan to be forfeited in case of default
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