Even though a business firms can be viewed as a portfolio of assets, firms are not rewarded for selecting a diversified portfolio of assets because investors can more efficiently diversify away unsystematic risk on their own.

Question

Quizplus · Accepted Answer

Investors can diversify their own portfolios to manage unsystematic risk, so firms are not rewarded for diversification as they are for managing systematic risk.

Even Though a Business Firms Can Be Viewed as a Portfolio