This OC Curve Represents a Sampling Plan Developed for a Lot

question 32

Multiple Choice

This OC curve represents a sampling plan developed for a lot size of 1000,a sample size of 15,and an acceptance number of 2.The probability of acceptance for each of the first six points appears next to the plotted point.What is the average outgoing quality for an incoming fraction defective of 0.25?

• A)Less than 0.045.
• B)Greater than or equal to 0.045 but less than 0.055.
• C)Greater than or equal to 0.055 but less than 0.065.
• D)Greater than or equal to 0.065.

---

Definitions:

Risk Premium

The return in excess of the risk-free rate of return that an investment is expected to yield.

Risky Asset

An investment that carries a significant possibility of losing some or all of its value.

Risk-Free Investment

An investment that is considered to be free of credit risk, with the most common examples being government-issued securities.

Capital Gains Return

The profit achieved from the sale of a security or investment which has increased in value over the holding period.