1) Information for this question: You are required to demonstrate your understanding of risk and how these impact companies and therefore returns for investing in these companies. You will demonstrate your understanding of systematic and unsystematic, business and financial risks in this question.

Tasks: Write your discussions in the text box provided and address the following questions.

Contrast the difference between systematic and unsystematic risks and provide an example for each. You can use a company you are familiar with to contextualise your discussions.

Contrast the difference between business and financial risks and provide an example for each. You can use a company you are familiar with to contextualise your discussions.

Explain how an investor can diversify unsystematic risks that you have discussed here in a portfolio. (100 150 words)