The use of the single index model to quantify systematic and unsystematic risk in maize production in development region C

This paper demonstrate the use of the single index model of Sharpe in order to quantify systematic and unsystematic risk for maize production in Development Region C (Orange Free State Region). The systematic risk shows the percentage of risk that is beyond the producers control. This risk is mostly anributable to market risk. The unsystematic risk on the other hand, is the percentage of risk that the producer can control. Unsystematic risk can be eliminated by diversification.