A Simulation Model Is Used to Test the Impact of the Number

question 30

Multiple Choice

A simulation model is used to test the impact of the number of sample customers at a supermarket. As the model is run, the decision maker watches the average number of customers in the store rapidly increase from zero until it levels off and holds a constant value. The simulation model is:

• A) not valid due to the lack of change.
• B) in steady state.
• C) not valid due to the fluctuation in the statistics.
• D) a random variable.

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Definitions:

Amortization Schedule

A table detailing each periodic payment on a loan over time, breaking down the amounts going towards principal and interest.

Loan to Value Ratio

A financial term employed by lenders that denotes the ratio between a loan amount and the value of an asset acquired.

Down Payment

An initial payment made when something is bought on credit.

Compounded Quarterly

A method of calculating interest where it is added to the principal amount every three months.