Which of the Following Is NOT a Step in Running

question 57

Multiple Choice

Which of the following is NOT a step in running a Monte Carlo simulation?

• A) setting up a probability distribution for important variables
• B) building a cumulative probability distribution for each variable
• C) establishing an interval of random numbers for each variable
• D) generating random numbers
• E) All of these are steps in running a Monte Carlo simulation.

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Definitions:

Anticipated Growth Rate

The expected rate at which a company, asset, or economy is predicted to grow over a certain period of time.

Free Cash Flow

The amount of cash generated by a company after accounting for operating expenses and capital expenditures.

Market Capitalization Rate

The market-consensus estimate of the appropriate discount rate for a firm’s cash flows.

Corporate Tax Rate

The tax imposed on the net income of a corporation, varying by country and sometimes within jurisdictions of countries.