Which of the Following Is Not a Step in Running

question 6

Multiple Choice

Which of the following is not a step in running a Monte Carlo simulation?

• A) setting up a probability distribution for important variables
• B) building a cumulative probability distribution for each variable
• C) establishing an interval of random numbers for each variable
• D) generating random numbers
• E) All of the above are steps in running a Monte Carlo simulation.

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Definitions:

Dividend Yield

The measure of how much a company pays out in dividends each year relative to its stock price, often expressed as a percentage.

Net Income

Net income is the total profit of a company after all expenses, taxes, and costs have been deducted from total revenues.

Market Price

The current price at which an asset or service can be bought or sold.

Diversified

The strategy of allocating investment across various financial instruments, industries, and other categories to mitigate risk.