In Making an Estimate of the Most Pessimistic Time for an Activity

question 136

Multiple Choice

In making an estimate of the most pessimistic time for an activity, a manager deliberately estimates this time too high (i.e., longer than it should be) . What is the result of this action, assuming the beta distribution is being used to make time estimates?

• A) The most likely time for this activity will be larger than it should be.
• B) The variance of the activity will be smaller than it should be.
• C) The beta distribution will be symmetric around its mean.
• D) The expected time for this activity will be larger than it should be.

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Definitions:

Domestic Investment

The total capital expenditures for the acquisition, maintenance, or improvement of physical assets within a country's borders.

Net Capital Outflow

The difference between the domestic country's sale of assets to foreigners and the domestic purchases of foreign assets over a given period, usually indicating how much a country is investing abroad compared to foreign investments in the country.

Government Budget Deficit

A situation where a government spends more money than it receives in revenue over a particular period, often leading to the accumulation of debt.

Real Exchange Rate

The rate at which the goods and services of one country can be exchanged for the goods and services of another, adjusted for inflation.