Reading 9: Common Probability Distributions - LOS l ～ Q1-3 simulation, style

mayanfang1

Q1. A drawback of historical simulation is it:

A)     depends on the accuracy of the random number generator.

B)     may not accurately reflect possible outcomes.

C)     may not account for very rare events.

Q2. Joan Biggs, CFA, acquires a large database of past returns on a variety of assets. Biggs then draws random samples of sets of returns from the database and analyzes the resulting distributions. Biggs is engaging in:

A)    historical simulation.

B)    Monte Carlo simulation.

C)    discrete analysis.

Q3. Monte Carlo simulation is necessary to:

A)     approximate solutions to complex problems.

B)     reduce sampling error.

C)     compute continuously compounded returns.

shing1314

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shannyzheng

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unknown

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kepei7763

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yuanweibaby

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