Because of the limited diversification potential of human capital, managers have an incentive to seek:

		Higher risk projects because they offer the potential for higher returns (payoffs) for the managers
		higher return projects because they are less risky
		lower risk projects, because these projects are in the best interest of all stakeholders
		lower risk projects, because these projects are in the best interest of stockholders
		lower risk projects, because these projects reduce the probability of the firm going bankrupt.