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What is the difference between systematic and unsystematic risk? How can diversification help reduce unsystematic risk? Can systematic risk be mitigated? Why and why not? (at least 200 word).

Please properly cite your references.

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The solution discusses what is the difference between systematic and unsystematic risk.

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"Interest rates, recession and wars all represent sources of systematic risk because they affect the entire market and cannot be avoided through diversification. Whereas this type of risk affects a broad range of securities, unsystematic risk affects a very specific group of securities or an individual security. Systematic ...

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Sheetal Jain, PGDM
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  • BComm, University of Delhi
  • Post Graduate Diploma in Management (Equivalent to MBA), All India Management Association
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