Economic State			Rate of Return if Economic State Occurs
Type	Probability		Imaging Center	Walk-in Clinic	Surgery Center	Birthing Center
Very poor	10%		-25%	15%	50%	6%
Poor	20%		-5%	10%	30%	7%
Average	40%		15%	0%	10%	8%
Good	20%		35%	25%	0%	9%
Very good	10%		55%	35%	-20%	10%
Expected rate of return			15%	12%	13%	8%
Standard deviation			21.90%	12.10%	18.50%	1.10%
Market beta m			1.4	1	0.7	0.3
Corporate beta c			0.7	1.4	-1.2	0.4

In regards to the stand-alone risk:

1. Which investment has the least risk and why?

2. If you had to select either the walk-in center or the birthing center, which would you select and why?

With respect to portfolio risk:

3. Why do market and corporate betas differ for the same project?

4. With a required market rate of return of 12% and a risk free rate of return of 4%, what are the required rates of return for the birthing center?