## Week Six Quiz >>> In a decision tree decision nodes are represented by circles >>> Probability and Statistics: To p or not to p?

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Question 1

In a decision tree, decision nodes are represented by circles.

**False**

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Question 4

In linear regression analysis, the dependent variable is typically denoted by:

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### 8.

Question 8

In a standard product mix problem, non-negativity constraints are required for the decision variables.

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### 2.

Question 2

Ignoring risk, in decision tree analysis we choose the option which will minimise the expected payoff.

True

**False**

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### 9.

Question 9

The results of a Monte Carlo simulation may be sensitive to the choice of input probability distribution(s).

**True**

False

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### 10.

Question 10

In Monte Carlo simulation, the expected outcome can be calculated using the:

**sample mean of the simulated values of the outcome variable**

sample variance of the simulated values of the outcome variable

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Question 5

Stock returns are defined as:

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Question 8

In a standard product mix problem, the decision variables are the:

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### 10.

Question 10

In Monte Carlo simulation, the quantification of risk can be calculated using the:

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### 1.

Question 1

In a decision tree, chance nodes are represented by squares.

True

**False**

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### 9.

Question 9

The results of a Monte Carlo simulation are never sensitive to the choice of input probability distribution(s).

True

**False**

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### 3.

Question 3

A decision-maker who prefers the certain outcome of £$x$ over a risk project with a mean (EMV) of £$x$ is:

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### 7.

Question 7

Linear programming models allow us to analyse:

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### 6.

Question 6

If a stock has a beta of 0.75, then:

if the market index ↑ by 0.75%, then the stock ↑ by 0.75%

if the market index ↑ by 0.75%, then the stock ↑ by 1%

**if the market index ↑ by 1%, then the stock ↑ by 0.75%**