Systematic risk

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Systematic risk is a group of large assets (i.e. market risk or non-diversifiable risk).

 

Unsystematic risk - also known as nonsystematic risk (diversifiable risk or asset-specific risk) is the opposite, one or small group of assets. Depending on the conditions of the market, general economic conditions may affect a company's financial health.

Answer the following questions in 100 word:

Unsystematic risk can be reduced with diversification, but systematic risk cannot. Why? 

 

Why not diversify unless the principle of diversification is not reducing risk?

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