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Synonyms for diversifiable risk are idiosyncratic risk,
unsystematicrisk, and security-specific risk.
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Public capital markets do not provide evidence of
unsystematicrisk since investors that fail to diversify can not expect additional returns.
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The other category of
unsystematicrisk is referred to as company specific risk.
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But the portfolio with a higher total risk is less diversified and therefore has a higher
unsystematicrisk which is not priced in the market.
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