Question: Risk can be characterized as diversifiable or nondiversifiable, depending on whether it is possible to eliminate the risk by holding a sufficiently diversified portfolio.

Risk can be characterized as diversifiable or nondiversifiable, depending on whether it

Risk can be characterized as diversifiable or nondiversifiable, depending on whether it is possible to eliminate the risk by holding a sufficiently diversified portfolio. Insurable risk is diversifiable. Why, then, don't real estate investors simply eliminate such risks by diversifying rather than paying an insurance company to handle the risk?

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