In a Portfolio,risk Is Evaluated in a Different Way Than

question 59

Multiple Choice

In a portfolio,risk is evaluated in a different way than with an individual project.In evaluating portfolio risk we:

• A) don't need to consider the impact of a given project on the overall risk of the firm.
• B) recognize that a risky investment will not create a portfolio with less risk.
• C) consider the risk of the project with the highest beta only.
• D) need to consider how the returns of the projects in the portfolio are correlated.