If a capital budgeting project has a higher corporate risk than the average risk contained in the firm's portfolio of assets, it generally has a:

Question

Quizplus · Accepted Answer

If a capital budgeting project has a higher corporate risk than the average risk contained in the firm's portfolio of assets, it generally has a greater beta risk. Beta represents the sensitivity of an asset's return to the market return. A higher beta indicates higher volatility and, thus, higher risk.

If a Capital Budgeting Project Has a Higher Corporate Risk