Explain diversifiable risk and undiversifiable risk
How are diversifiable risk and undiversifiable risk associated with portfolio?
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The contribution from the uncorrelated εs to the portfolio vanishes as we increase the number of assets in the portfolio; it is the risk related with the diversifiable risk. The remaining risk, that is correlated with the index, it is the undiversifiable systematic risk.
Describe Euro-medium-term-note market Normal 0
$100 is received at the beginning of year 1, $200 is received at the beginning of year 2, and $300 is received at the beginning of year 3. If these cash flows are deposited at 12 percent, their combined future value at the end of year 3 is ________.
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