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Invest different stocks in the same industry

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Diversification cannot reduce the portfolio risk if you invest different stocks in the same industry. Why? Explain. Diversification reduces the portfolio risk if you invest different stocks in the different industries. Why? Explain.

If you would like to form your stock investment portfolio, (1) how many stocks would you include in the portfolio, and (2) what are these stocks (companies) in the portfolio. Explain why you choose these companies.

Reference no: EM132645928

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