If Managers Ensure Zero Percent Product Failure, All of the Following

question 25

Multiple Choice

If managers ensure zero percent product failure, all of the following are true except which one?

• A)Obtaining zero percent product failure is likely to make the product very expensive.
• B)Obtaining zero percent product failure is not likely to be possible.
• C)The product would never fail.
• D)Obtaining 100 percent product perfection is likely to be possible.

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Definitions:

CAPM

The Capital Asset Pricing Model, a formula used to determine the theoretical expected return of an investment given its risk relative to the market.

Risk-free Asset

An investment with zero risk of financial loss, typically considered to be government bonds.

Systematic Risk

Systematic risk refers to the risk inherent to the entire market or market segment, which cannot be mitigated through diversification.

CAPM

A financial theory that calculates the expected return on an investment based on its risk relative to the market as a whole.