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Why is some risk diversifiable and some is not? Systematic risk deserves a risk premium, while unsystematic risk does not, since unsystematic risk can be
- Why is some risk diversifiable and some is not? Systematic risk deserves a risk premium, while unsystematic risk does not, since unsystematic risk can be diversified away. Diversification reduces risk!!! The market will not reward you for bearing unsystematic risk since you can diversify it away.
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
12th Edition
978-0030243998, 30243998, 324422695, 978-0324422696
