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Which of the following statements is most correct? Diversification eliminates market risk (also known as systematic or non-diversifiable risk). Diversification does not affect risk. Diversification

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Which of the following statements is most correct? Diversification eliminates market risk (also known as systematic or non-diversifiable risk). Diversification does not affect risk. Diversification works better when investments are concentrated within one industry rather than across all industries. Diversification eliminates firm-specific risk (also known as non-systematic or diversifiable risk)

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