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Reviewed by Bhavana | Updated on Aug 16, 2023
What Does Systematic Risk Refer to?
Systemic risk refers to the risk inherent in the whole market or part of the market. Systematic risk is also called the undiversifiable risk, market risk, or volatility. It affects not just a particular stock or industry, but the overall market. This kind of risk is not only unpredictable but also it is absolutely impossible to avoid. It can not be mitigated by diversification, only by hedging or by using the proper asset allocation strategy.
How to Manage Systematic Risk?
To manage systematic risk effectively, investors should ensure that their portfolios include a range of asset classes, such as cash, real estate, and fixed income, each of which will react in a different way in the event of a significant systemic change. For example, an increase in interest rates will make certain new-issue bonds more valuable, while causing some corporate stocks to fall in price as investors perceive executive teams to cut spending. Ensuring that a portfolio contains enough income-generating securities in the event of an interest rate rise will minimize the loss of value in some equities.
Difference Between Systematic Risk and Unsystematic Risk
Systemic risk can be seen as the probability of a loss associated with the entire market or a portion. Therefore, unsystematic risk refers to the possibility of a loss within a particular industry or protection. Systematic risk implies other investment-related risks, such as risks related to the industry.
The opposite of systemic risk, unsystematic risk, has an effect on a very particular securities group or individual security. Diversification may help to mitigate unsystematic risk.
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- What Does Systematic Risk Refer to?
- How to Manage Systematic Risk?
- Difference Between Systematic Risk and Unsystematic Risk
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As a seasoned expert in the field of financial technology (FinTech) and taxation, I bring a wealth of knowledge and experience to decipher the intricate details embedded in the provided article. With a comprehensive understanding of the industry's nuances and a proven track record in navigating complex financial landscapes, I am well-equipped to shed light on the concepts encapsulated in the text.
The article delves into a range of products and solutions offered by various companies in the FinTech domain, covering aspects such as GST filing, accounts payable, AI automation, ITC optimization, e-invoicing, e-way bills, bulk invoicing, TDS return filing, invoice discounting, EBITDA maximization, financing, working capital solutions, automated secretarial compliance, and more.
Let's break down some key concepts highlighted in the article:
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Individual Products:
- GSTG1-G9 Filing ASP/GSP Solution: This refers to a solution for filing GST returns, possibly for businesses dealing with Goods and Services Tax (GST).
- Accounts Payable: This involves managing and processing payments owed by a company to its suppliers or creditors.
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MaxITCO:
- Optimize ITC for Profitability: ITC stands for Input Tax Credit, and optimizing it involves maximizing the benefit a business can get from the taxes paid on its inputs.
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Elevate Processes with AI Automation and Vendor Delight:
- This suggests the use of Artificial Intelligence (AI) in automating processes related to financial transactions and enhancing the satisfaction of vendors.
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E-Invoicing & E-Way Bill:
- E-Invoicing: The generation and exchange of invoices electronically.
- E-Way Bill: A document required for the movement of goods, generated electronically.
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Bulk Invoicing within any ERP:
- Streamlining the process of generating and managing a large volume of invoices within an Enterprise Resource Planning (ERP) system.
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TDSe-TDS Return Filing Solution:
- Addressing solutions related to TDS (Tax Deducted at Source) return filing, which is a mandatory tax compliance in India.
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Invoice Discounting:
- The practice of using company invoices as collateral to get a loan, often to improve cash flow.
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Financing:
- Providing financial assistance, possibly to businesses, for various purposes like working capital or expansion.
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Instant Working Capital Financing:
- Swift and immediate financial support for day-to-day business operations.
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CimplyFive:
- A provider of automated secretarial compliance solutions, likely assisting businesses in meeting legal and regulatory requirements.
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Product Suites:
- Clear Finance Cloud: A comprehensive finance management solution emphasizing process automation, control, savings, and productivity.
- Clear Compliance Cloud: A suite addressing GST and direct tax compliance.
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Consumer Products:
- ITR Filing: Individual Income Tax Return filing services.
- Tax Consultant Services: Services catering to personal tax and business compliances.
In summary, the article provides insights into the diverse offerings within the FinTech industry, covering a spectrum of financial and taxation solutions for individuals and businesses. The mentioned companies aim to streamline processes, enhance compliance, and optimize financial outcomes through innovative technologies and services.
