Question: Question 4 a) Define non-diversifiable risk. Explain why, in theory, non-diversifiable risk is considered the only relevant risk for determination of an investor's required

Question 4 a) Define non-diversifiable risk. Explain why, in theory, non-diversifiable risk is considered the only relevant risk for determination of an investor's required return on a risky asset? (1+2-3 marks) b) What is the efficient market hypothesis? Discuss the three forms of the efficient market hypothesis. (2+3=5 marks) c) Briefly describe the following types of mergers: i) horizontal, ii) vertical, iii) congeneric and iv) conglomerate. (0.54-2 marks)

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a Nondiversifiable risk also known as systematic risk or market risk refers to the risk that is inherent in the overall market or economy and cannot be eliminated through diversification This type of ... View full answer

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