Question: D31. 1) Explain the difference between individual stock and systematic risk. 2) Why do stock market investors seem to ignore unique risks when calculating expected

D31. 1) Explain the difference between individual stock and systematic risk. 2) Why do stock market investors seem to ignore unique risks when calculating expected rates of return? 2) Because unique risks are assumed to be diversified away. Since unique risk is assumed by particular stock, investors diversify the portfolio to ignore risk that goes along with certain industries or stocks

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