Which of the following terms describes the risk of individual projects to a corporation, taking into consideration that each project represents only one of the firm's portfolio of assets?
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A. B. C. D. E.B
Corporate, or "within-firm" risk, is defined as the risk of individual projects to a corporation, taking into consideration the fact that each project represents only one of the firm's assets. In examining corporaterisk, there is an implicit assumption that some of the total risk to the firm's profits from the addition of new projects will be partially diversified away. Corporate risk is measured by the project's impact on uncertainty about the firm's future earnings.