Knowing the differences between these types of risks and techniques to manage them can enhance portfolio management. Imagine you invest in a manufacturing company that produces electronic goods. Due to a semiconductor shortage, the company faces supply chain disruptions, bringing its entire manufacturing facility to a halt. A regulatory policy change by the Reserve Bank of India leads to increased scrutiny and disruption of the company’s operations. What are examples of unsystematic variance? This variability is essentially random; some individuals change in one direction, others in an...