=+You are young and not as risk averse as most people, because you feel you will be

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=+You are young and not as risk averse as most people, because you feel you will be able to bounce back from a financial disaster should one occur. Draw indifference curves on the diagram for a person who is only slightly risk averse. Demonstrate an optimal risk-return point on the risk-return line by labelling it point J'.

d Briefly discuss the benefits of greater diversification. Do these benefits continue to increase with ever greater diversification?

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