Suppose We Compare the Difference Between the NPV of a Financial

question 17

Multiple Choice

Suppose we compare the difference between the NPV of a financial model in which the means are entered for all input random variables and the NPV of a financial model in which the most likely values are entered for all input random variables.If we see a large difference between the NPV's,this illustrates:

• A) the value at risk (VAR) 
• B) the effect of randomness 
• C) the flaw of averages 
• D) the bias of the analyst

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