Diversifiable and non-diversifiable risk are the core concepts in this chapter. From theft and earthquake insurance examples, we learned why we can readily reduce individual specific risk while common risks do not. To check your understanding, could you find an actual example relevant to two different types of risk, and how you can (or cannot) diversify those two? Please follow the steps:

1) Find actual examples on the Internet or other sources (Do not quote from Investopedia.com or marketinsight.com...they are not proper sources! No credit will be given if you cited them). It does not necessarily one source, you can combine multiple sources or examples to show different risks.

2) Summarize briefly how this example works (as we see in theft and earthquake examples), states assumptions, and which one is diversifiable and the other one is not.