Critical Thinking Questions Case 2 You and Ellen Are Cramming

question 46

Multiple Choice

Critical Thinking Questions Case 2 You and Ellen are cramming for your exam about the second phase of the program development life cycle, the design of the user interface. Ellen tells you the percentage of program design time that developers spend on the user interface. You think that she is exaggerating but then you double-check and see that she is right. What range does she give you?

• A) 25% to 40%
• B) 30% to 50%
• C) 35% to 60%
• D) 40% to 70%

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Definitions:

Risk Premium

The risk premium is the additional return an investor requires for choosing a risky investment over a risk-free asset, compensating for the extra risk undertaken.

Arithmetic Average Return

The simple average of a series of returns generated over a period of time.

Variance

A statistical measurement of the dispersion of returns for a given security or market index, indicating volatility.

Time Horizon

The length of time over which an investment is expected to be held or a financial goal is to be achieved.