Hi David, Looking over my notes I found the following 3 sentences in my notes, which seem to contradict each other. Can you why they are correct or incorrect? Thanks. Sleepybird. 1. In a friction-less market, financial transactions to reduce a firm's systematic risk will not increase firm value. 2. Operational changes to reduce a firm's systematic risk may increase firm value. 3. Risk management can create value by reducing diversifiable/idiosyncratic/firm specific risk (i.e., non-systematic risk).