Neas-Seminars

What's the definition of "Risk"


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By masu - 6/26/2006 1:07:10 PM

Is there anyone can tell what's the full definition of "Risk"? or just indicate me where I can find it in the text book. Thanks a lot^^

[NEAS: Systematic risk is the risk that can not be eliminated by diversification. Brealey and Myers use the CAPM to measure systematic risk.

Total risk is the uncertainty in return. Brealey and Myers use the standard deviation of the return as a proxy for total risk.

Expected return depends on systematic risk if investor are risk averse. If markets are efficient, it does not depend on non-systematic risk.]