Which of the Following Is True of the Historical Simulation

question 9

Multiple Choice

Which of the following is true of the historical simulation method for calculating VaR?

• A) It fits historical data on the behavior of variables to a normal distribution
• B) It fits historical data on the behavior of variables to a lognormal distribution
• C) It assumes that what will happen in the future is a random sample from what has happened in the past
• D) It uses Monte Carlo simulation to create random future scenarios

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Definitions:

Two Different Machines

Refers to the comparison or utilization of two distinct types of machinery or equipment, often considered in the context of production efficiency, capability, or suitability for specific tasks.

Work Centres

Specific areas within a manufacturing process where particular types of tasks or operations are performed.

Work-Centre Master File

A database or file that contains detailed information about each work center in a manufacturing facility, including capabilities, capacities, and scheduling data.