标题: Financial market risk-risk in retirement, Confused [打印本页]

---

作者: Howd    时间: 2011-7-11 15:22     标题: Financial market risk-risk in retirement, Confused

Reading 19-lifetime financial advice:Human capital, asset allocation and life insurance.

As mentioned Financial market risk is one of the three primary risks destroy desire lifestyle in retirement.

While it says "Financial market risk can be redused by modern portfolio theory (diversification)", I am confused here.

I think Financial market risk=system risk, diversification can only reduce unsystem risk.

so why Financial market risk can be redused by modern portfolio theory (diversification)?

---

作者: Iginla2011    时间: 2011-7-11 15:22

Financial market risk = systematic + unsystematicl risks
Diversification allows eliminating unsystematic risks and, thus, reduces market risk

---

作者: liangfeng    时间: 2011-7-11 15:22

Thanx guys, The key point is: Financial market risk = systematic + unsystematicl risks

I just want to get through every point in the notes.

---

欢迎光临 CFA论坛 (http://forum.theanalystspace.com/)

Powered by Discuz! 7.2