Definition for : Specific risk

Specific Risk is independent of Market-wide phenomena and is due to factors affecting just the one company, such as mismanagement, a factory fire, an invention that renders a company's main product line obsolete, etc. Specific Risk is not remunerated in the Stock Market. Specific Risk is also called Intrinsic risk or Idiosyncratic risk.

(See Chapter 19 The required rate of return of the Vernimmen)

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