The Appropriate Discount Rate Used in Decision Tree Methodology

question 72

Multiple Choice

The appropriate discount rate used in decision tree methodology

• A)should be risk-adjusted,and risk may vary by period and decision node.
• B)should be risk-adjusted,and risk may not vary by period and decision node.
• C)should not be risk-adjusted,and risk may vary by period and decision node.
• D)should not be risk-adjusted,and risk may not vary by period and decision node.

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Definitions:

Fire Insurance Policy

A contract between an insurer and policyholder that provides financial protection against losses or damage due to fire.

Unoccupied

Referring to a place or dwelling that is not currently being lived in or used.

Vacant

Vacant refers to a space or position that is unoccupied or not filled, available for use or to be taken by someone.

Uninhabitable

A condition of a property that makes it unsuitable for people to live in due to risks to health and safety.