Which of the following are true regarding risk and return? Diversification is nessicary to reduce unsystematic risk Diversification is nessicary to reduce systematic risk total risk xan be found by adding an asset beta to its standard deviation
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- Systematic risk refers to the risk inherent to the entire market or market segment, which cannot be eliminated through diversification. - Unsystematic risk, on the other hand, is specific to a particular company or industry and can be reduced or eliminated Show more…
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based on your understanding of portfolio risk identify whether each statement is true or false. the unsystematic risk component of the portfolio risk can be reduced by adding negatively created stock to the portfolio because of the effects of diversification the portfolio's is likely t be more than the average or all stocks standard deviations.aportfolio risk is likely to be smaller than the average all stocks standard deviation because diversification lowers the portfolio risks portfolio risk will increase if more stocks that are negatively correlated with other stocks are dded to the portfolio
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