A Disadvantage of the Historic or Back Simulation Model for Quantifying

question 75

Multiple Choice

A disadvantage of the historic or back simulation model for quantifying market risk includes

• A)calculation of a standard deviation of returns is not required.
• B)calculation of the correlation between asset returns is not required.
• C)estimates of past returns used in the model may not be relevant to the current market returns.
• D)it accounts for non-standard return distributions.

Analyze the significance and calculation of net present value in investment decisions.

Determine how depreciation affects annual cash inflow calculations.

Perform incremental analysis for making financial decisions between different plans.

Identify and differentiate various types of costs, including sunk, incremental, opportunity, and variable costs.

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Definitions:

Contrast Medium

A material employed in medical imaging to enhance the clarity of internal body structures.

Allergy

An altered or acquired state of sensitivity; abnormal reaction of the body to substances normally harmless.

Iodine

A chemical element necessary for thyroid gland function, which helps regulate metabolism.

All-Liquid Diet

A diet that consists solely of liquids or foods that turn to liquid at room or body temperature.