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.

---

Definitions:

Subordinates

Individuals who are lower in rank or position and are typically subject to the direction and control of their superiors.

Vroom-Jago Leadership Model

A decision-making model that helps leaders choose how much involvement their teams and subordinates should have in the decision-making process.

Best Leadership Style

A subjective concept suggesting there is an optimal way of leading that maximizes team performance and satisfaction, often dependent on situational factors.

Ethics Competency

The ability to recognize ethical dilemmas, understand various ethical perspectives, and make decisions that align with ethical principles.