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:

Invest

The act of allocating resources, often money, in the expectation of generating an income or profit.

Launching

The act of officially starting or introducing a new product, service, or business to the market.

Probabilities

An assessment of an event's probability, denoted by a figure that falls between 0 and 1.

Revenues

The aggregate income derived from the trade of goods or provision of services, constituting the core business of a corporation.