Monte Carlo Simulation Involves the Following Steps

question 21

Multiple Choice

Monte Carlo simulation involves the following steps:
I.Step 1: Modeling the project;
II.Step 2: Specifying probabilities;
III.Step 3: Simulating cash flows;
IV.Step 4: Calculating present value

• A)I and II only
• B)I, II, and III only
• C)II, III, and IV only
• D)I, II, III, and IV

---

Definitions:

Usury Law

refers to regulations governing the amount of interest that can be charged on a loan, intended to protect borrowers from excessively high rates.

Loaned Out

Refers to funds that have been borrowed out to others, usually by a financial institution.

Usury Law

Legislation that sets maximum interest rates that can be charged on loans, to protect consumers from excessive charges.

Interest Rate

The cost of borrowing money or the reward for saving, typically expressed as a percentage of the principal amount annually.