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:

Reproduction

The process in biology where offspring are generated from their progenitors.

Generation

A group of individuals born and living around the same time, typically considered to be about 20–30 years.

Development

The process through which an organism grows or progresses, often involving physical, psychological, or social changes.

Multicellular Adult

An organism composed of multiple cells that has reached a mature or fully grown stage.