How do investors demand to be compensated for risk why, Financial Management

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How do investors demand to be compensated for risk why

Most finance textbooks say that investors should diversify because they will not be compensated for diversifiable risk. This may wrongly imply that the market has a formal (automatic) reward system for risk.

a. How do investors “demand” to be compensated for risk?

b. Why aren’t investors compensated for diversifiable (unsystematic) risk?

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Financial Management: How do investors demand to be compensated for risk why

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Financial Management: How do investors demand to be compensated for risk why

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