Suppose We Compare the Difference Between the NPV of a Financial

question 68

Multiple Choice

Suppose we compare the difference between the NPV of a financial model in which the means are entered for all input random variables and the NPV of a financial model in which the most likely values are entered for all input random variables. A large difference between the NPV's demonstrate:

• A) the value at risk (VAR)
• B) the effect of randomness
• C) the flaw of averages
• D) the bias of the analyst
• E) none of these choices

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Definitions:

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