Close A Market risk is measured by the project's beta coefficient. It is assessed from the standpoint of a well-diversified stockholder. If accepting the project changes the firm’s systematic risk and overall rate of return to investors, it is market risk. Monte Carlo simulation is a computer-generated probability simulation of the most likely outcome, given a set of probable future events. It got its name from its roots in casino gambling. The base-case scenario is the most likely scenario in a capital budgeting analysis. It is the version where all variables are set at the expected result, as opposed to the best-case and worse-case scenarios.