The First Unit of a Product Took 900 Hours to Build

question 52

Multiple Choice

The first unit of a product took 900 hours to build and the learning curve is 90%.How long will it take to make the first 3 units? (Use Table E.3)

• A)less than or equal to 2,470 hours
• B)from 2,470 to 2,472 hours
• C)from 2,472 to 2,475 hours
• D)from 2,475 to 2,478 hours
• E)from 2,478 to 2,481 hours

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Definitions:

True Risk

The actual level of risk associated with an investment or decision, considering all factors including unknowable future events.

Systematic Risk Principle

Principle stating that the expected return on a risky asset depends only on that asset’s systematic risk.

Expected Return

The weighted average of all possible returns for an investment, with each return being weighted by its probability of occurrence.

CAPM

The Capital Asset Pricing Model, a theory that describes the relationship between systematic risk and expected return for assets, particularly stocks.