Should the effects of a portfolio impact the way investors


1. Should the effects of a portfolio impact the way investors think about the riskiness of individual stocks?

2. If you decided to hold a one-stock portfolio (and consequently were exposed to more risk than diversified investors), could you expect to be compensated for all of your risk; that is, could you earn a risk premium on the part of your risk that you could have eliminated by diversifying?

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Financial Management: Should the effects of a portfolio impact the way investors
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