a. What happens to the standard deviation of return for a portfolio if we increase the number
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a. What happens to the standard deviation of return for a portfolio if we increase the number of securities in the portfolio?
b. What is the principle of diversification?
c. Why is some risk diversifiable? Why is some risk not diversifiable?
d. Why can’t systematic risk be diversified away?
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a When we increase the number of securities in a portfolio the standard deviation of return for the portfolio tends to decrease This reduction in stan...View the full answer
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Related Book For
Fundamentals of corporate finance
ISBN: 978-0073382395
9th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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