Which of the Following Is Characteristic of Monte Carlo Simulation

question 60

Multiple Choice

Which of the following is characteristic of Monte Carlo simulation?

• A)Results are usually not valid, but provide managers with an approximation.
• B)Time compression is not possible using this technique.
• C)Statistical sampling is used to create outcomes for many trials.
• D)Computer packages such as SimQuick and Arena can show on-screen graphics of customers moving through the system or inventory accumulation.

Comprehend the methodology for testing multifactor CAPM and APT, including specifying risk factors and testing hedge portfolios.

Recognize the limitations and testable hypotheses of the CAPM according to Roll.

Grasp the requirements for testing multifactor CAPM and APT, such as identification and testing of hedge portfolios.

Analyze the empirical performance of conventional and conditional CAPM, including the impact of human capital and firm size on model fit.

---

Definitions:

Extraction Cost

The expenses associated with the removal of raw materials or resources from their natural setting, which can include labor, equipment, and operational costs.

User Cost

The cost associated with using a capital asset, considering both the depreciation of the asset and the foregone interest that could have been earned by investing funds elsewhere.

Nonrenewable Resource

A natural resource that cannot be replenished at the same rate at which it is consumed.

Future

A term referring to events that have not yet occurred or financial contracts regarding assets to be delivered or transacted at a later date.