} ga('send', 'pageview'); Commercial insurers use SIC codes to determine if your business is in a high risk industry classification and to determine your premium. What Is The Terrorism Risk Insurance Act (TRIA)? S&P 500) and the return of risk-free securities. This division includes establishments providing, to the general public or to other business enterprises, passenger and freight transportation, communications services, or electricity, gas, steam, water or sanitary services, and all establishments of the United States Postal Service. Barriers to competitive entry such as initial capital investment, license requirements or unique know-how. A: The spot risk-free rate information (10-year and 20-year Treasury bonds) for the relevant valuation data is sourced from the Federal Reserve . The new system provides five levels of classification (compared to four in SIC) in detailed codes that have a maximum of six digits (up from four in SIC) and detailed classifications called "U.S. Industry" (instead of "Industry" in the SIC). So from the above example, one can see investors in Reliance industries will be getting risk premium of 1.5% above the government bond rate. The Standard Industrial Classification (SIC) system was created by the government to categorize businesses by industry and uses four-digit numerical codes to classify them. High-Risk SIC Codes & Restricted Industrial Classifications You can search via the SIC Code directory which lays out everything you need for quick access. Designed as a resource guide for business appraisers, the site's audience encompasses a broad mix of business owners, professionals, educators, students, and other parties interested in these topics. img.emoji { SIC = Standard Industry Classification. Computed as implied Industry Risk Premium = (industry beta x ERP) - ERP. Avoid High Risk NAICS Codes and Choosing Better NAICS Codes. 34. The first two digits of the code identify the major industry group, the third digit identifies the industry group and the fourth digit identifies the industry. .top-nav, .top-nav ul ul {background-color:#4d4d4d;} color: #27a8ad !important; text-shadow: 0 1px 1px #27a8ad !important;}
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