A Description of the Range and Relative Likelihood of Possible

question 27

Multiple Choice

A description of the range and relative likelihood of possible values of an uncertain variable is known as a

• A)risk analysis.
• B)probability distribution.
• C)base-case scenario.
• D)simulation optimization.

---

Definitions:

Financial Calculation

The process of using mathematical formulas to evaluate financial data regarding investments, loans, profits, and other money-related matters.

Arithmetic Operations

Fundamental mathematical operations including addition, subtraction, multiplication, and division.

Financial Mathematics

Financial mathematics is a field of applied mathematics concerned with financial markets, aiming at solving problems related to valuation, investment, and risk management.

Annuity Formula

A mathematical formula used to calculate the future value of an annuity or the payments required to meet a certain future value.