“The global market portfolio is the portfolio that minimizes nondiversifiable risk since it is the most diversified portfolio possible.”
How is this not contradictionairy?
Non-diversifiable risk is risk that cannot be completely diversified away.
You can have different levels of non-diversifiable risk… it makes sense that the global portfolio would have the least amount of systematic risk.
If you look into the CFAI errata, they correct that statement from non-diversifiable to diversifiable. It’s written in page 207 of vol3 and the correction can be found in the errata.