Which of the Following Statements About Project Risk Analysis in Not-For-Profit

question 2

Multiple Choice

Which of the following statements about project risk analysis in not-for-profit firms is incorrect?

• A) A project's corporate beta measures the contribution of the project to the overall corporate risk of the firm.
• B) A project's corporate beta is found (at least conceptually) by regressing returns on the project against returns on the market portfolio.
• C) A project's corporate beta is defined as (σ_P/σ_F)r_PF, where σ_P is the standard deviation of the project's returns, σ_F is the standard deviation of the firm's returns, and r_PF is the correlation among the two sets of returns.
• D) In practice, it is usually difficult, if not impossible, to directly measure a project's corporate risk, so project risk analysis typically focuses on stand-alone risk.
• E) The market risk of a project is not relevant to not-for-profit firms.

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Definitions:

Pay Discrimination

Inequitable compensation among employees that is often based on gender, race, age, disability, or other protected characteristics rather than job performance or qualifications.

Substantially Equal

Describes items or quantities that are nearly identical in value, size, or importance, within a reasonable degree of variation.

Implied Employment Contracts

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Reasonable Expectations

A legal standard used to assess what an average person might anticipate in a given set of circumstances.