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Portfolio theory makes it possible to incorporate Risk into capital budgeting through risk adjusted returns. However, portfolio theory omits an important element of risk that

  1. Portfolio theory makes it possible to incorporate Risk into capital budgeting through risk adjusted returns. However, portfolio theory omits an important element of risk that is relevant in capital budgeting. That missing element is:

    a.

    unsystematic risk.
    b.

    liquidity risk.
    c.

    market risk.
    d.

    systematic risk.

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