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1. Describe what happens to portfolio risk as more and more assets are added to portfolio? 2. How does systematic risk differ from unsystematic risk?

1. Describe what happens to portfolio risk as more and more assets are added to portfolio?

2. How does systematic risk differ from unsystematic risk?

3. Identify which of the following are unsystematic or systematic risks?

a) Labor union at Caterpillar declared a strike

b) Contrary to what was stated President was reelected.

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