Which of these are problems associated with the assignment of a project beta?
I.Determining the beta for a project which creates a new industry
II.Determining whether a beta represents more or less risk than that of the overall market
III.The project beta may differ from the beta of the existing firms in the selected industry
IV.Selecting the appropriate industry to which the project applies

Question

Quizplus · Accepted Answer

Determining the beta for a new industry (I) and selecting the appropriate industry for the project (IV) are both potential problems associated with the assignment of a project beta. Additionally, the project beta may differ from the beta of the existing firms in the selected industry (III). The second option (II) is not necessarily a problem, but rather a consideration in determining whether the beta represents more or less risk than that of the overall market. Therefore, the correct answer is E.

Which of These Are Problems Associated with the Assignment of a Project