An Advantage of the Probabilistic Approach to Estimating an Asset's

question 8

Multiple Choice

An advantage of the probabilistic approach to estimating an asset's returns is:

• A) history always repeats itself.
• B) it does not require one to assume that the future will look like the past.
• C) recent history is more important than future risk.
• D) exact probabilities are easy to estimate.

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Definitions:

Structural Unemployment

People who remain unemployed for long periods of time, often with little hope of finding new jobs like their old ones.

Specialized Knowledge

Expertise or skills focused on a specific branch of study, occupation, or field of endeavor, distinguished by its depth and proficiency.

Cost-Push Inflation

Inflation caused by an increase in prices of inputs like labour, raw material, etc., leading to a decrease in the supply of these goods.

Raw Materials

Fundamental materials that are used in the production process to create goods and products.