Question: 3. Why some risk are diversifiable and some risks are nondiversifiable? Does it follow that an investor can control the level of unsystematic risk in

 3. Why some risk are diversifiable and some risks are nondiversifiable?

3. Why some risk are diversifiable and some risks are nondiversifiable? Does it follow that an investor can control the level of unsystematic risk in a portfolio, but not the level of systematic risk? What type of risk is relevant for determining the expected return? Also explain why one of these types of risks is rewarded with a risk premium while the other type not

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