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You work for an investment management firm as a junior executive. Your senior manager asked you to explain to a client how the following concepts

You work for an investment management firm as a junior executive. Your senior manager asked you to explain to a client how the following concepts should be considered when investing in risky securities: risk-averse coefficient, risk-return trade-off and diversification.

Briefly explain the important aspects that you highlight to the client when you explain the above concepts.

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