#8
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Re: Cost of equity
[ QUOTE ]
This is wrong. There is no way "the index" is always less risky than an individual stock. [/ QUOTE ] In general, the risk in owning an index is less than the risk of holding a single stock, due to diversification reducing the overall risk! That said, some indexes are overdiversified, and you can achieve similar diversification risk reduction by holding a few select stocks. |
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