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6/ What is corporate risk? (select all that apply) Corporate risk is a function of the projects NPV and standard deviation and its correlation with
6/ What is corporate risk? (select all that apply)
Corporate risk is a function of the projects NPV and standard deviation and its correlation with the returns on other firm projects.
The projects total risk, if it were operated independently.
Usually measured by standard deviation (or coefficient of variation).
The projects risk when considering the firms other projects, i.e., diversification within the firm.
However, it ignores the firms diversification among projects and investors diversification among firms.
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