[Verse 1] When you buy a stock or bond today There are risks that come into play Two different types you need to know One stays put, one you can let go Market forces pull us all around Economic news shakes every ground But company problems stand alone In their specific risk zone [Chorus] Systematic can't escape Market-wide, it takes its shape Unsystematic goes away Diversify and you're okay Only systematic matters for the price 'Cause specific risk you can slice and dice [Verse 2] Interest rates and GDP Affect the whole economy War and inflation, recession fears Touch every stock for many years But if Tesla has a recall Or Apple's CEO takes a fall That's unsystematic, company-specific Portfolio spread makes it terrific [Chorus] Systematic can't escape Market-wide, it takes its shape Unsystematic goes away Diversify and you're okay Only systematic matters for the price 'Cause specific risk you can slice and dice [Bridge] Thirty stocks or even more Spread your risk from shore to shore Different sectors, different size Watch unsystematic risk subside Beta measures systematic exposure Market risk needs fair disclosure [Chorus] Systematic can't escape Market-wide, it takes its shape Unsystematic goes away Diversify and you're okay Only systematic matters for the price 'Cause specific risk you can slice and dice [Outro] So remember when you're pricing assets right Only systematic risk affects the sight Diversification is your saving grace Puts unsystematic risk right in its place
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