Which of the Following Statements Is Correct

question 41

Multiple Choice

Which of the following statements is correct?

• A) A process can be in statistical control, yet it can be producing defects in abundance.
• B) At least three points outside the upper or lower control limits on a control chart are required before the process is deemed to be out of control.
• C) If a process is out of control, then the variation that is present is limited to common cause variation.
• D) When special cause variation is present, the process can be expected to be in control.

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Definitions:

Net Present Value

A calculation that compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account; used in capital budgeting to analyze the profitability of an investment or project.

Forward Exchange Rate

The exchange rate at which two parties agree to exchange currencies at a future date.

Forward Trade

A non-standardized contract between two parties to buy or sell an asset at a specified future date for a price that is agreed upon today.

Spot Exchange Rate

The current price for exchanging one currency for another for immediate delivery, reflecting the value of one currency in terms of another at a specific moment in time.