First, consider some basic background information concerning the differences between not-for-profit organizations and investor-owned firms. What is a corporate beta? How does it differ from a market beta?

Sandra McCloud, a finance major in her last term of college, is currently scheduling her placement interviews through the university's career resource center. Her list of companies is typical of most finance majors: several commercial banks, a few industrial firms, and one brokerage house. However, she noticed that a representative of a not-for-profit hospital is scheduling interviews next week, and the position--that of financial analyst--appears to be exactly what Sandra has in mind. Sandra wants to sign up for an interview, but she is concerned that she knows nothing about not-for-profit organizations and how they differ from the investor-owned firms that she has learned about in her finance classes. In spite of her worries, Sandra scheduled an appointment with the hospital representative, and she now wants to learn more about not-for-profit businesses before the interview.
To begin the learning process, Sandra drew up the following set of questions. See if you can help her answer them.

The corporate beta is a quantitative measure of corporate risk; it is the slope of the corporate characteristic line, which is the regression line that results when the project's returns are plotted on the y axis and the returns on the firm's total operations are plotted on the x axis. By definition, a company’s average corporate beta is 1.0.For a firm with many projects, a particular project’s corporate beta indicates the relativeamount of risk that the project contributes to corporate risk. For example, if a project’s corporate beta is 2.0,then it contributes twice as much risk to the company as a project with a corporate beta of 1.0. A project's market beta is a similar quantitative measure of a project's market risk, but it measures the amount of risk that the project contributes to the market portfolio.