The Monte Carlo Simulation

question 4

Multiple Choice

The Monte Carlo simulation:

• A)Involves making assumptions that specify the shapes of the probability distributions for each future cash flow in a capital budgeting project.
• B)Is an approach that involves the use of numbers drawn randomly from probability distributions.
• C)is a computer simulation which calculates NPV based on random observations for each of a project's cash flows.
• D)​All of the above

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Definitions:

Class Structure

A society’s economic hierarchy that categorizes groups of people based on their socioeconomic status.

Social Constructions

Theories or concepts that suggest that the realities of the world are not inherent, but are constructed by social processes, shaped by cultural and historical contexts.

Social Stratification

The division of society into different hierarchically arranged levels based on factors like wealth, power, race, or education.

Achieved Status

Attributes developed throughout life as a result of effort and skill (e.g., course grades).