Monte Carlo Simulation

question 185

Multiple Choice

Monte Carlo simulation

• A) Can be useful for estimating a project's stand-alone risk.
• B) Is capable of using probability distributions for variables as input data instead of a single numerical estimate for each variable.
• C) Produces both an expected NPV (or IRR)and a measure of the riskiness of the NPV or IRR.
• D) All of the above.
• E) Only answers a and b are correct.

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Definitions:

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