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Hello John
If an investor only holds an balanced portfolio of all stocks and shares on the stock market, would he suffer systematic or unsystematic risk? Kindly explain the reason for your answer.Only systematic risk.
Unsystematic risk is risk due to factors in the particular company and can be diversified away by creating a portfolio.
Systematic risk is due to the risk in the economy and this cannot be diversified away (although the level of it is different in different business sectors).
Why have you not watched the free lecture on CAPM where this is explained in detail?
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