Understanding risks that affect projects and the impact of risk consideration

Garcia Real Estate is involved in commercial real estate ventures throughout

the United States. Some of these ventures are much riskier than other

ventures because of market conditions in different regions of the country.

If Garcia does not risk$-$adjust its discount rate for specific ventures properly,

which of the following is likely to occur over time?

Check all that apply.

The firm's overall risk level will increase.

The firm will increase in value.

The firm could potentially reject projects that provide a higher rate of return

than the company should require.

How do managers typically deal with within$-$firm risk and beta risk when