Compensation for bearing systematic risk: You have constructed a diversified portfolio of stocks such that there is

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Compensation for bearing systematic risk: You have constructed a diversified portfolio of stocks such that there is no unsystematic risk. Explain why the expected return of that portfolio should be greater than the expected return of a risk-free security.

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Fundamentals Of Corporate Finance

ISBN: 9781119795438

5th Edition

Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates

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