Monte Carlo Simulations Are So Named Because It Is the Name

question 90

Multiple Choice

Monte Carlo simulations are so named because it is the name of:

• A) a famous European gambling casino.
• B) a popular brand of automobile.
• C) the first individual to develop an automated simulation machine.
• D) the person who discovered the necessary algebraic computations.

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Definitions:

Cost of Equity

The return a company must offer investors to compensate for the risk of investing in its stock, usually estimated using models like the Capital Asset Pricing Model (CAPM).

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, and typically pays dividends before common stock.

Common Stock

Shares of ownership in a corporation that entitle the shareholder to vote at shareholder meetings and receive dividends.

Beta

An indicator of how much a stock's price fluctuates in comparison to the general market.