Which of the Following Statements Is CORRECT

question 26

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.

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Definitions:

Handling Interruptions

The process of managing disturbances or disruptions in workflow or activities effectively to maintain focus and productivity.

Consolidate Similar Tasks

The strategy of grouping like tasks together to improve efficiency and reduce the time spent switching between different types of activities.

Daily Priorities

The tasks or activities deemed most important to accomplish within a day.

Discretionary Time

Free time available to an individual after all obligations have been met, allowing for personal interests or relaxation.