For the exam, I think it is important to memorize the list as is with the named
heading.
However, for understanding the material, the point is an interesting one. He
says they are the same thing and as the chapters unfold, he uses the term
systematic most of the time - even when discussing exchange risk.
Again, for the exam if they ask for a list of 3 pervasive risks, I think you
should answer the 3 that are listed. BUT what do you do if the question is
multi-choice and some "systematic" risks are in the choices.???? (right answer
might be to challenge the question the very next day by US Mail.)
Kim Ward
CNA
On Fri, 20 Feb 1998, "Betsy A. Branagan"
<BBRANAGAN.ARBELLA/0002170471@MCIMAIL.COM> wrote:
>
>Pervasive risks vs. Systematic risks (page 2-12). He lists them separately
>- but aren't systematic risks pervasive by definition? Also, "market risk"
>which is listed under systematic risks is described as "Another pervasive
>risk associated...".
>
>The 96 exam had a question (#14) which gets at this confusion!
>
>Why do the authors sort the risks this way? Are his pervasive risks
>("purchasing power risk", "political risk", and "exchange risk") also
>systematic? And are all his systematic risks pervasive - or only market
>risk?
>
>Any ideas on how an exam question should be answered?
>
>Betsy Branagan
>bbranagan.arbella@mcimail.com
>
>
>
>
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