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In broad terms, why is some risk diversifiable? Why are some risks nondiversifiable? Does it follow...

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Finance

In broad terms, why is some risk diversifiable? Why are somerisks nondiversifiable? Does it follow that an investor can controlthe level of unsystematic risk in a portfolio, but not the level ofsystematic risk?

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There are two types of risk 1 Systematic Risk or Non diversifiable 2 Unsystematic Risk or diversifiable It is relevant for Investment The following risks are Non diversifiable a Market Risk The Price of security may fluctuate due to changing psychology of the investor The irrationality of security market may cause losses These losses    See Answer
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In broad terms, why is some risk diversifiable? Why are somerisks nondiversifiable? Does it follow that an investor can controlthe level of unsystematic risk in a portfolio, but not the level ofsystematic risk?

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