A Nonprofit Board Asked an Outside Consulting Organization to Assess

question 8

Multiple Choice

A nonprofit board asked an outside consulting organization to assess the nonprofit's program performance. Which best practice is the board applying?

• A) revitalization
• B) results-oriented
• C) strategic thinking
• D) independent-mindedness

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Definitions:

Systematic Risk

The risk inherent to the entire market or market segment, often referred to as market risk, which cannot be eliminated through diversification.

Coefficient of Variation Risk

A statistical measure used to assess the risk of an investment by calculating the ratio of the standard deviation to the mean return, indicating variability in relation to the expected return.

Unsystematic Risk

Also known as specific risk, it refers to the risk associated with individual assets, distinct from the market's overall movements.

Systematic Risk

The inherent risk associated with the entire market or market segment, which cannot be mitigated through diversification.