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One Benefit of the Historic or Back Simulation Approach Is

question 47

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One benefit of the historic or back simulation approach is that it does not need calculation of standard deviations and correlations (or assume normal distributions for asset returns) to calculate the portfolio risk figures.


Definitions:

Unit Product Cost

The total cost (variable and fixed) incurred to produce, store, and sell one unit of a product.

Elastic Demand

Describes a market condition in which the demand for a product is sensitive to price changes.

Target Costing

A pricing strategy in which the selling price and profit margin are used to determine the maximum cost that can be incurred on a product, with the aim of ensuring competitiveness and profitability.

Target Profit

The specific net income a business intends to reach within a designated timeframe.

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