Question

Classify the following events as mostly systematic or mostly un-systematic. Is the distinction clear in every case? a. Short term interest rates decrease expectantly. b. The interest rate a company pays on its short term debt borrowing is increased by the bank. C. Oil prices expectantly decline. d. An oil tanker runs aground creating a large oil spill. e. A major manufacturing company loses a multimillion dollar product liability suit. f. The Supreme Court of Canada decision substantially broadens producer liability for injuries suffered by product users.

Answer 1

Systematic is that the decision affects the overall market while unsystematic is specific to a industry or a company.

Now apply this to the above statements.

a. Systematic because this affects the whole market/economy

b. Unsystematic because it affects the company financials

c. Systematic because changes in the oil price affects all the people/entire economy

d. Creating a oil spill leads to pollution and it affects the all people as a whole.Hence it is systematic

e. Unsystematic, it is a problem for a company

f. Systematic, it applies to all the producers in the market equally.