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Unsystematic risk: Unsystematic risk is a result of factor(s) disrupting the normal functioning of an organisation. Situations like changes in government policies, rise in competition, change in consumer taste and preferences, development of substitute products, technological changes, etc can directly impact the performance of a company. Unlike the former, these can be mitigated by carefully diversifying the portfolio in quality assets and companies, depending on the investor’s investment horizon, corpus, and risk profile. Some of the types of unsystematic risk include business risk, credit risk, and reputation risk.
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