Which of the Following Statements Concerning Control Chart Limits Is

question 140

Multiple Choice

Which of the following statements concerning control chart limits is true?

• A) The smaller the value of z, the more narrow the control limits are and the more sensitive the chart is to changes in the production process.
• B) The larger the value of z, the more narrow the control limits are and the more sensitive the chart is to changes in the production process.
• C) The smaller the value of z, the wider the control limits are and the less sensitive the chart is to changes in the production process.
• D) The larger the value of z, the more narrow the control limits are and the less sensitive the chart is to changes in the production process.

---

Definitions:

Geometric Average

A method of calculating the average rate of return that considers the compounding effect of returns over time.

Risk-Free Security

An investment that is assumed to be free from any risk of financial loss, typically represented by government bonds.

Arithmetic Return

The simple average of a set of returns over a period.