If a Project's Only Risk Is Diversifiable

question 24

Multiple Choice

If a project's only risk is diversifiable,

• A) only half the risk premium should be added to the discount rate.
• B) only half the risk premium should be subtracted from the discount rate.
• C) the risk premium should be added to the discount rate.
• D) the risk premium should be subtracted from the discount rate.
• E) no risk premium should be attached to the discount rate.

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Definitions:

Action Potential

A rapid change in electrical potential across the membrane of a nerve cell as a nerve impulse is transmitted.

Schwann Cell

A type of glial cell in the peripheral nervous system that wraps around neurons, forming a myelin sheath to facilitate electrical conduction.

Neuron

A specialized cell transmitting nerve impulses; a nerve cell, fundamental unit of the nervous system.

EPSP

Stands for Excitatory Postsynaptic Potential, a temporary increase in postsynaptic membrane potential caused by the flow of positively charged ions into the postsynaptic cell, making it more likely that the cell will fire an action potential.