Explain why the risk premium of diversifiable risk is zero.

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Corporate Finance

ISBN: 9781292446318

6th Global Edition

Authors: Jonathan Berk, Peter DeMarzo

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Question Posted: Apr 04, 2024 04:00 AM

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Explain why the risk premium of diversifiable risk is zero.

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The risk premium associated with diversifiable risk is considered to be zero due to the principles of modern portfolio theory MPT and the concept of d...View the full answer

Corporate Finance

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