Session 5: Risk and Return Models and The Marginal Investor

Podcast: Aswath Damodaran · Aswath Damodaran

Opublikowano: 2026-10-19

In this session, we address the question of what risks get rewarded and which ones do not, by looking diversifiable versus non-diversifiable risk. The best way to understand diversifiable and non-diversifiable risk is to take a company and consider all of the risks that it is exposed to and then categorize these risks into whether they are likely to affect just the company, the company and a few competitors, the entire sector or the overall market. The marginal investor, if diversified, cares and prices in only the last type of risk. In the last part of the class, we...