If One Project Has a Higher Standard Deviation Than Another

question 64

Multiple Choice

If one project has a higher standard deviation than another,

• A) it may have a lower risk.
• B) it may have a lower expected value.
• C) it has fewer possible outcomes.
• D) it may be riskier, but this can only be determined by the coefficient of variation.

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Definitions:

Colorado Rockies

A major mountain range in the western United States extending from the northernmost part of New Mexico to British Columbia in Canada.

Materials Standards

Benchmarks or specifications set for the quality, quantity, and cost of materials used in production to achieve performance and efficiency goals.

Direct Materials Purchases Variance

This term refers to the difference between the actual cost of materials purchased and the expected (standard) cost of materials needed to manufacture the products during a specific period.

Materials Price Variance

The difference between the actual cost of materials and the expected (standard) cost.