The difference among beta risk, within-firm risk and stand-alone risk of a project. Introduction: Beta Risk: Beta risk is a systematic risk that can be reduced through a diversified portfolio or investment projects. It is based on the market related and known as market risk. Within-firm Risk: The firm or project specific risk is known as within-firm risk. It is based on the project and assumes that a particular project is the only investment. Hence, the risk associated with it cannot be diversified for the corporation. Stand-alone Risk: Stand-alone risk is based on the assumption that only one project is available with the company and the single stock is available for the investors. Therefore, the stand-alone risk cannot be diversified.

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Answer 1

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Chapter 12, Problem 7Q

Summary Introduction

To identify: The difference among beta risk, within-firm risk and stand-alone risk of a project.

Introduction:

Beta Risk:

Beta risk is a systematic risk that can be reduced through a diversified portfolio or investment projects. It is based on the market related and known as market risk.

Within-firm Risk:

The firm or project specific risk is known as within-firm risk. It is based on the project and assumes that a particular project is the only investment. Hence, the risk associated with it cannot be diversified for the corporation.

Stand-alone Risk:

Stand-alone risk is based on the assumption that only one project is available with the company and the single stock is available for the investors. Therefore, the stand-alone risk cannot be diversified.

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Answer 2

Question

Chapter 12, Problem 7Q

Summary Introduction

To identify: The difference among beta risk, within-firm risk and stand-alone risk of a project.

Introduction:

Beta Risk:

Beta risk is a systematic risk that can be reduced through a diversified portfolio or investment projects. It is based on the market related and known as market risk.

Within-firm Risk:

The firm or project specific risk is known as within-firm risk. It is based on the project and assumes that a particular project is the only investment. Hence, the risk associated with it cannot be diversified for the corporation.

Stand-alone Risk:

Stand-alone risk is based on the assumption that only one project is available with the company and the single stock is available for the investors. Therefore, the stand-alone risk cannot be diversified.

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Answer 3

Question

Chapter 12, Problem 7Q

Summary Introduction

To identify: The difference among beta risk, within-firm risk and stand-alone risk of a project.

Introduction:

Beta Risk:

Beta risk is a systematic risk that can be reduced through a diversified portfolio or investment projects. It is based on the market related and known as market risk.

Within-firm Risk:

The firm or project specific risk is known as within-firm risk. It is based on the project and assumes that a particular project is the only investment. Hence, the risk associated with it cannot be diversified for the corporation.

Stand-alone Risk:

Stand-alone risk is based on the assumption that only one project is available with the company and the single stock is available for the investors. Therefore, the stand-alone risk cannot be diversified.

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Answer 4

Question

Chapter 12, Problem 7Q

Summary Introduction

To identify: The difference among beta risk, within-firm risk and stand-alone risk of a project.

Introduction:

Beta Risk:

Beta risk is a systematic risk that can be reduced through a diversified portfolio or investment projects. It is based on the market related and known as market risk.

Within-firm Risk:

The firm or project specific risk is known as within-firm risk. It is based on the project and assumes that a particular project is the only investment. Hence, the risk associated with it cannot be diversified for the corporation.

Stand-alone Risk:

Stand-alone risk is based on the assumption that only one project is available with the company and the single stock is available for the investors. Therefore, the stand-alone risk cannot be diversified.

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Answer 5

Chapter 12, Problem 7Q

Summary Introduction

To identify: The difference among beta risk, within-firm risk and stand-alone risk of a project.

Introduction:

Beta Risk:

Beta risk is a systematic risk that can be reduced through a diversified portfolio or investment projects. It is based on the market related and known as market risk.

Within-firm Risk:

The firm or project specific risk is known as within-firm risk. It is based on the project and assumes that a particular project is the only investment. Hence, the risk associated with it cannot be diversified for the corporation.

Stand-alone Risk:

Stand-alone risk is based on the assumption that only one project is available with the company and the single stock is available for the investors. Therefore, the stand-alone risk cannot be diversified.

Answer 6

Chapter 12, Problem 7Q

Summary Introduction

To identify: The difference among beta risk, within-firm risk and stand-alone risk of a project.

Introduction:

Beta Risk:

Beta risk is a systematic risk that can be reduced through a diversified portfolio or investment projects. It is based on the market related and known as market risk.

Within-firm Risk:

The firm or project specific risk is known as within-firm risk. It is based on the project and assumes that a particular project is the only investment. Hence, the risk associated with it cannot be diversified for the corporation.

Stand-alone Risk:

Stand-alone risk is based on the assumption that only one project is available with the company and the single stock is available for the investors. Therefore, the stand-alone risk cannot be diversified.

Answer 7

Chapter 12, Problem 7Q

Summary Introduction

To identify: The difference among beta risk, within-firm risk and stand-alone risk of a project.

Introduction:

Beta Risk:

Beta risk is a systematic risk that can be reduced through a diversified portfolio or investment projects. It is based on the market related and known as market risk.

Within-firm Risk:

The firm or project specific risk is known as within-firm risk. It is based on the project and assumes that a particular project is the only investment. Hence, the risk associated with it cannot be diversified for the corporation.

Stand-alone Risk:

Stand-alone risk is based on the assumption that only one project is available with the company and the single stock is available for the investors. Therefore, the stand-alone risk cannot be diversified.

Answer 8

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Answer 10

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Answer 11

Ch. 12 - Prob. 1Q Ch. 12 - Prob. 2Q Ch. 12 - Explain why net operating working capital is...Ch. 12 - Prob. 4Q Ch. 12 - Prob. 5Q Ch. 12 - Prob. 6Q Ch. 12 - Prob. 7Q Ch. 12 - Prob. 8Q Ch. 12 - Prob. 9Q Ch. 12 - If you were the CFO of a company that had to...

Solution Summary: The author explains the difference between beta, within-firm, and stand-alone risk of a project.

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