Which of the Following Best Describes a Monte Carlo Simulation

question 12

Multiple Choice

Which of the following best describes a Monte Carlo simulation?

• A) a technique for simulating an attack on a system
• B) a formula that estimates the cost of countermeasures
• C) a procedural system that simulates a catastrophe
• D) an analytical method that simulates a real-life system for risk analysis

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Definitions:

CVP Income Statement

A financial statement that shows the effects of changes in cost and volume on a company's profits, based on Cost-Volume-Profit analysis.

Raw Material

Basic materials used in the production process that are transformed into finished goods.

Sales Price Reduction

A decrease in the listed selling price of goods or services, often to stimulate demand or respond to market conditions.

Contribution Margin Ratio

A financial indicator that measures how a product's selling price exceeds its variable costs, expressed as a percentage.