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Diversification allows investors to reduce risk without an equivalent reduction in returns through the construction of an investment portfolio. Based on your understanding of the

Diversification allows investors to reduce risk without an equivalent reduction in returns through the construction of an investment portfolio. Based on your understanding of the concept of diversification in a portfolio setting, which of the following best describes the type(s) of risk(s) that are reduced through diversification? A. Idiosyncratic risk only B. Neither idiosyncratic risk nor systematic risk C. Both idiosyncratic risk and systematic risk D. Systematic risk only

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