In a Portfolio, Risk Is Evaluated in a Different Way

question 76

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 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 are true.

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