Part B

Orange$-$Mobile PLC is a high$-$tech, Australian$-$based mobile company located in Melbourne, Victoria. Orange$-$Mobile PLC plans to incorporate the "Share Play" feature into their upcoming Afourer $777$ mobile version, scheduled for launch in $2025.$ The upcoming launch of the new product will face several risks, and the company's group finance manager has highlighted them as follows:

Risk Factors

Continues increase in the interest rates in the Australian economy.

Change in encryption laws in the Mobile phone industry.

The entry of Grapes$-$Mobile $($USA$\text{'}$s second$-$largest mobile provider$)$ into the Australian market.

Changes in the market price of securities that cause a significant fall in stock price.

Orange$-$Mobile PLC has been ordered by the government to recall the Afourer $777$ due to a battery$-$related technical issue.

Increasing Australian dollar depreciation against the US dollar.

Recently Orange$-$Mobile PLC is found to have prepared fraudulent financial statements.

Requirements :

Total risk can be decomposed into systematic risk and unsystematic risk. Using the aforementioned events, explain each component of risk, and how each is affected by increasing the number of securities in the portfolio.