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PaulKet PaulKet
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6 years ago
Distinguish between risk that can be reduced through diversification and risk that cannot be reduced through diversification.
Textbook 
Microeconomics: Theory and Applications with Calculus

Microeconomics: Theory and Applications with Calculus


Edition: 4th
Author:
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The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

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wrote...
6 years ago
Risk that cannot be diversified away affects all investments equally. Examples would include war and natural disasters. Risk that can be reduced through diversification includes changes to the value of an investment that is not perfectly positively correlated with the values of other investments.
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