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A fundamental idea of CAPM is that: diversification is costly, hence investors will care only about systematic risk. diversification requires the investor to keep track

A fundamental idea of CAPM is that:

diversification is costly, hence investors will care only about systematic risk.

diversification requires the investor to keep track of the performance of a larger numbers of stocks.

investors are able to diversify costlessly, therefore being able to get rid of firm-specific risk.

None of the above.

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