Multiple Choice Questions

1. When there are at least two values for a parameter and it is possible to estimate the chance that each may occur, this situation is known as:

(a) Uncertainty

(b) Risk

(c) Standard deviation

(d) Cost estimating

2. A deterministic economic analysis is one wherein:

(a) Single-value estimates are used exclusively

(b) Risk is taken into account

(c) A range of values for each parameter is included in the analysis

(d) Taxes and inflation are not considered in the cash flow estimates

3. Decision making under risk includes all of the following except:

(a) Expected value analysis

(b) Simulation

(c) Using only single-value estimates

(d) Probability

4. All of the following are elements in decision making under risk except:

(a) Random variable

(b) Cost indexes

(c) Probability

(d) Cumulative distribution

5. The symbol that represents the true population mean is:

(a) (

(b) s

(c) µ

(d) X

6. The revenue from an oil dispersant product has averaged $15,000 per month for the past 12 months. If the value of Ʃ(Xi − X)2 is $1,600,000, the standard deviation is closest to:

(a) $381

(b) $652

(c) $958

(d) $1265