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The risk premium of a stock is NOT affected by its ________. unsystematic risk market risk systematic risk undiversifiable risk
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The risk premium of a stock is NOT affected by its ________. unsystematic risk market risk systematic risk undiversifiable risk

User Potatosalad
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  • The role of diversification is to narrow the range of possible outcomes. Unsystematic risk does not factor into an investment 's risk premium, since this type of risk can be diversified away.

User MatthewJ
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