The Greater the Perceived Risk of an Asset, the Lower

question 117

True/False

The greater the perceived risk of an asset, the lower the expected rate of return.

---

Definitions:

Manage Risk

The process of identifying, assessing, and controlling threats to an organization's capital and earnings.

Tolerate Failure

The capacity of an organization or system to endure and learn from failures without suffering catastrophic consequences.

Value Engineering

A systematic approach to improve the 'value' of products or services by using an examination of function. Value can be increased by either improving the function or reducing the cost.

Quality Function Deployment (QFD)

A process for determining customer requirements (customer “wants”) and translating them into the attributes (the “hows”) that each functional area can understand and act on.