A risk associated with project and way considered by well diversified stockholder is classified as______________?
Correct answer: B. Beta risk
- A. Expected risk
- B. Beta risk
- C. Industry risk
- D. Returning risk
Explanation
A well-diversified stockholder is concerned mainly with systematic risk, which reflects a project's sensitivity to market movements and is measured by beta. Industry-specific or project-specific risk can usually be diversified away.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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