Ask the Class to State How Simulations Could Be Used

question 18

Essay

Ask the class to state how simulations could be used to improve pricing models.Highlight situations where historical results violated pricing assumptions and how simulations may have provided better results.

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Definitions:

Personal Cash

Refers to the liquid assets that an individual holds for the purpose of immediate or near-term spending or investment.

Accounts Receivable

Receivables from customers against goods or services supplied by a business, pending payment.

Capital Statement

A financial statement that illustrates changes in a company's equity over a certain period, including investments, withdrawals, and net income or loss.

Net Income

The total earnings of a company after deducting all expenses and taxes, indicating the company's profitability over a specific period.