Which of the Following Statements Is CORRECT

question 14

Multiple Choice

Which of the following statements is CORRECT?

• A) One advantage of sensitivity analysis relative to scenario analysis is that it explicitly takes into account the probability of specific effects occurring, whereas scenario analysis cannot account for probabilities.
• B) Well-diversified stockholders do not need to consider market risk when determining required rates of return.
• C) Market risk is important, but it does not have a direct effect on stock prices because it only affects beta.
• D) Simulation analysis is a computerized version of scenario analysis where input variables are selected randomly on the basis of their probability distributions.
• E) Sensitivity analysis is a good way to measure market risk because it explicitly takes into account diversification effects.

---

Definitions:

Gay Liberation Movement

A social and political movement of the late 20th century that sought to achieve equal rights and societal acceptance for LGBTQ+ individuals.

Stonewall Riots

A series of spontaneous, violent demonstrations by members of the LGBTQ community against a police raid that took place at the Stonewall Inn, New York City in 1969, marking the beginning of the modern gay rights movement.

Sexual Scripts

Sexual scripts are socio-culturally constructed guidelines that define how individuals are supposed to feel and behave in sexual contexts.

Symbolic Interactionists

Sociologists who study how people use symbols to create meaning and communicate with each other in society.