Explain the difference between systematic and unsystematic


1. Explain how the slope of the security market line is determined and why every stock that is correctly priced, according to CAPM, will lie on this line.

2. Explain the difference between systematic and unsystematic risk. Also explain why one of these types of risks is rewarded with a risk premium while the other type is not.

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Financial Management: Explain the difference between systematic and unsystematic
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