Which of the following statements is FALSE? O Because investors are risk averse, they will...
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Which of the following statements is FALSE? O Because investors are risk averse, they will demand a risk premium to hold unsystematic risk. o Over any given period, the risk of holding a stock is that the dividends plus the final stock price will be higher or lower than expected, which makes the realized return risky. Because investors can eliminate firm-specific risk "for free" by diversifying their portfolios, they will not require a reward or risk premium for holding it. O The risk premium for diversifiable risk is zero, so investors are not compensated for holding firm-specific risk
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