[auditorzonline]

thank you very much Rajiv!

[auditorzonline]

I may be wrong – but just give a thought, based on the principle that we only use WACC when there is no change at the risk level and the gearing, that is when Bequity=Bassets….

Obviously JM, could guide us both correctly….

[auditorzonline]

Fantastic John! greatly appreciate your response, in particular, the time you had taken out to clarify it…I can justify the same to myself now!

[auditorzonline]

Thanks – however, my question was not wrt to the link between sys ans unsys, it fairly understandable that sys risk are driven due to the economical “market” condition, hence, should you invest at negatively correlated investements, such as British Petro. and British airways, should the economic condition turn in favour of petro. you will have worse returns from the airline industry as whole, nonetheless, you would have had hedged your invest through returns from BP – thus negatively correlated…

Developing on the same concept hence, I would repeat my question if by having negatively correlated investment can we eliminate sys risk as well?

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