When Changing Financial Model Assumptions, Which of the Following Is

question 53

Multiple Choice

When changing financial model assumptions, which of the following is true?

• A) Change more than one assumption at a time
• B) Make large changes in assumptions
• C) Change only one assumption at a time
• D) Only change assumptions impacting the income statement
• E) Only change assumptions impacting the balance sheet

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Definitions:

Marginal Probability

is the probability of an event occurring without considering other related events.

Coefficient of Correlation

The coefficient of correlation, also known as Pearson's r, measures the strength and direction of a linear relationship between two quantitative variables.

Marginal Probability

The probability of an event occurring in a probability distribution, regardless of the outcome of other variables.

Probability Distribution

A mathematical function that describes the likelihood of getting each possible value that a random variable can assume.