If a Project Is Small Relative to the Total Firm

question 11

True/False

If a project is small relative to the total firm, and if its returns are not highly correlated with the returns on the firm's other assets, then the project may not be very risky in either the within-firm (corporate) or the market risk sense, even if the returns on the project are highly uncertain and thus the project has a high degree of stand-alone risk.

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Definitions:

CS

Often used as an abbreviation for Computer Science, a field of study that encompasses the theory, experimentation, and engineering that form the basis for the design and use of computers.

Spontaneous Recovery

After a pause in exposure to the stimulus that originally elicited it, a previously vanished conditioned response once again manifests.

Extinction

Within psychology, it's the progressive decline and ultimate vanishing of a conditioned reaction because the conditioned stimulus is no longer associated with the unconditioned stimulus.

Allergy Attack

A sudden, acute allergic reaction to a substance (allergen) to which the body has become sensitized, leading to symptoms like sneezing, itching, and difficulty breathing.