Portfolio Risk Is Evaluated Differently Than Individual Project Risk

question 31

Multiple Choice

Portfolio risk is evaluated differently than individual project risk. 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 may create a portfolio with less risk.
• C) need to consider how the returns of the projects in the portfolio are correlated.
• D) all of these options are true.

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Definitions:

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A behavioral disorder in children characterized by persistent patterns of defiant, disobedient, and hostile behavior towards authority figures.

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A mental disorder diagnosed in childhood or adolescence characterized by a persistent pattern of disobedient, hostile, and defiant behavior towards authority figures.