Corporate Social Responsibility and Systematic Risk †MyAssignmenthelp

Question: Discuss about the Corporate Social Responsibility and Systematic Risk. Answer: Introduction: The main reason behind the selection of the stock is mainly the overall returns and reducing unsystematic risk. The overall return that is provided on yearly average basis is mainly at 7.98%, which is relatively adequate and the unsystematic risk is at 0.0085. Therefore, it could be understood that the return is high and unsystematic risk is relatively low, which is adequate for investment purposes. However, there are some negative points, which could be minimised by using adequate diversification method. The overall beta of the company is mainly at 0.777, while the yearly average standard deviation is at 1.02%. This relevant increment in the risk of investment could mainly be reduced with the help of diversification. Kiselakova et al., (2015) stated that constriction of portfolio is mainly conducted to reduce the systematic risk, where high return is estimated, while low risk is associated with the investment. The share of Royal Bank of Canada mainly has high beta, which make the overall investment in the stock is a risky endeavour. In addition, the rising stock involved in the investments mainly reduces its overall weight in the portfolio. Furthermore, the stock could only be added due to the high return that is provided annually. Therefore, only 25% of the total capital could be conducted in the company, as it has been providing constant return on yearly basis. Park, Song Lee (2017) mentioned that using the diversified portfolio directly allows the investor to hedge its risk and generate targeted returns from investment. Reference: Kiselakova, D., Horvathova, J., Sofrankova, B., Soltes, M. (2015). Analysis of risks and their impact on enterprise performance by creating Enterprise Risk Model.Polish Journal of Management Studies,11. Park, S., Song, S., Lee, S. (2017). Corporate social responsibility and systematic risk of restaurant firms: The moderating role of geographical diversification.Tourism Management,59, 610-620. RY Historical prices | Royal Bank Of Canada Stock - Yahoo Finance. (2017).Au.finance.yahoo.com. Retrieved 31 October 2017, from https://au.finance.yahoo.com/quote/RY/history?period1=1351621800period2=1509388200interval=1dfilter=historyfrequency=1d