Which of the Following Statements Is CORRECT

question 62

Multiple Choice

Which of the following statements is CORRECT?

• A) Sensitivity analysis is a good way to measure market risk because it explicitly takes into account diversification effects.
• B) One advantage of sensitivity analysis relative to scenario analysis is that it explicitly takes into account the probability of specific effects occurring,whereas scenario analysis cannot account for probabilities.
• C) Well-diversified stockholders do not need to consider market risk when determining required rates of return.
• D) Market risk is important,but it does not have a direct effect on stock prices because it only affects beta.
• E) Simulation analysis is a computerized version of scenario analysis where input variables are selected randomly on the basis of their probability distributions.

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Definitions:

Voice Dimension

An aspect of communication that includes tone, pitch, and volume, which can affect the message's impact.

Persuasive Presentation

A presentation or speech designed to convince or influence the audience regarding a specific viewpoint or action.

Grab Attention

The process of capturing the focus or interest of an audience, particularly at the beginning of a presentation or advertisement.

Effective Author

A writer skilled at conveying their message or story in a way that resonates with and impacts the reader.