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

question 39

Multiple Choice

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

• A) need to consider the impact of a given project on the overall risk of the firm.
• B) recognize that a risky investment always creates a portfolio with less risk.
• C) need to ensure all the projects in the portfolio are positively correlated.
• D) only consider the average beta.

---

Definitions:

Times

Often refers to the frequency or occasions of events happening or the current state or conditions of the world or specific areas.

Molecules of Cocaine

Organic compounds that constitute the chemical structure of cocaine, a powerful stimulant drug derived from the coca plant.

Brain

The central organ of the human nervous system, responsible for processing sensory information, regulating bodily functions, and enabling cognitive abilities such as thought and emotion.

Seconds

A unit of time equal to one sixtieth of a minute, also used to denote a moment or brief period of time.