Which of the Following Is True of the Historical Simulation

question 9

Multiple Choice

Which of the following is true of the historical simulation method for calculating VaR?

• A) It fits historical data on the behavior of variables to a normal distribution
• B) It fits historical data on the behavior of variables to a lognormal distribution
• C) It assumes that what will happen in the future is a random sample from what has happened in the past
• D) It uses Monte Carlo simulation to create random future scenarios

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Definitions:

Cultural Negotiation

The process of negotiation that is influenced by the cultural backgrounds of the parties involved, including their practices, beliefs, and communication styles.

Competitive Bargainers

Negotiators who approach the negotiation process with the goal of maximizing their own outcomes, often at the expense of the relationship with the other party.

Interdependence

A mutual reliance between two or more groups or entities, where each is dependent on the other.

Concede Slowly

The strategy of gradually acknowledging or yielding to another's point of view or demands, typically used in negotiations or discussions to maintain control or buy time.