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Why do company managers spend money and other resources on implementing a corporate risk management program, given finance theory shows that investors can effectively avoid

Why do company managers spend money and other resources on implementing a corporate risk management program, given finance theory shows that investors can effectively avoid companyspecific risk by holding a diversified portfolio? In answering this question, comment on the role of corporate risk management in nonperfect capital markets, explaining how it can add value to the company.

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