The Overall Risk Factor for the Project Is Known to Be

question 41

Multiple Choice

The overall risk factor for the project is known to be 0.5.The individual failure probability and consequence scores are not known with certainty,only that all of the failure probability scores are identical and all of the consequence scores are identical.What are the individual failure probability scores? $$\begin{array} { | l | l | l | l | } \hline \text { Maturity } & \mathrm { X } & \text { Cost } & \mathrm { Y } \\\hline \text { Complexity } & \mathrm { X } & \text { Schedule } & \mathrm { Y } \\\hline \text { Dependency } & \mathrm { X } & \text { Reliability } & \mathrm { Y } \\\hline & & \text { Performance } & \mathrm { Y } \\\hline\end{array}$$

• A) 0.316
• B) 0.267
• C) 0.236
• D) 0.347

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Definitions:

Treasury Bills

Short-term government securities with maturities of one year or less sold at a discount from their face value.

Call Option

A call option is a financial contract that gives the holder the right, but not the obligation, to buy an asset at a predetermined price within a specific time period.

Call Option Contracts

Financial contracts that give the buyer the right, but not the obligation, to buy a stock, bond, commodity, or other assets at a specified price within a specific time period.

Strike Price

The fixed price at which the holder of an option can buy (call option) or sell (put option) the underlying security or commodity.