Which of the following is among the questions that financial analysts try to answer with simulation models?
A) Mean and variance of a project NPV
B) Probability that a project with have a negative NPV
C) Probability that a company will have to borrow a certain amount during the next year
D) Mean and variance of a company's profit during the next fiscal year
E) All of these options

Question

Quizplus · Accepted Answer

Financial analysts use simulation models to answer all of these questions. Simulation models help in predicting the mean and variance of a project's NPV, the probability of a project having a negative NPV, the probability of a company having to borrow a certain amount in the next year, and the mean and variance of a company's profit in the next fiscal year.

Which of the Following Is Among the Questions That Financial