Using Simulation Has a Few Drawbacks

question 50

True/False

Using simulation has a few drawbacks. Individual cash flows have to be estimated subjectively which can be difficult.

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Definitions:

Interest Rate

The percentage of a sum of money charged for its use, which can be seen as the cost of borrowing money or the return on saving.

Rule Of 70

A method used to estimate the number of years it will take for a variable to double, calculated by dividing 70 by the annual growth rate.

Interest Rate

The proportion of a specified sum that is added as a charge for borrowing it, usually stated as an annual rate.

Utility Function

A mathematical representation describing how a consumer ranks different bundles of goods according to levels of satisfaction.