A Description of the Range and Relative Likelihood of Possible

question 27

Multiple Choice

A description of the range and relative likelihood of possible values of an uncertain variable is known as a

• A)risk analysis.
• B)probability distribution.
• C)base-case scenario.
• D)simulation optimization.

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Definitions:

Derivative

A financial instrument whose value is based on or derived from one or more underlying assets.

Asset Account

An account on a company's balance sheet that represents a resource with economic value owned or controlled as a result of past transactions.

Liability Account

A Liability Account represents a company's financial obligations or debts that arise during the course of business operations.

Fair Market Value

The estimated price at which an asset would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell.