Question: This week you started reading Module 7 and you were introduced to the concept of portfolios and diversification. Explain what risks can and cannot be

This week you started reading Module 7 and you were introduced to the concept of portfolios and diversification. Explain what risks can and cannot be address by diversification.

Some things to consider as you answer include these questions.

Why do we build portfolios?
Why would two investors wish for two different portfolios?
What is the source of the diversification benefit?

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