Question: Explain how a shareholder can, without knowing the future, diversify away the unsystematic risk of your company's stock potentially suffering a return that unexpectedly turns

Explain how a shareholder can, without knowing the future, diversify away the unsystematic risk of your company's stock potentially suffering a return that unexpectedly turns out to equal the expected return in c.1 minus 77%.

E(R) = 4.88%

Stock Losing = 4.88 - 77 = 72.12%

Explain diversification and how it works

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