Chartered Financial Analyst Level 2
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Which of the following statements regarding the Monte Carlo method to value bonds is most accurate?
Which of the following statements regarding the Monte Carlo method to value bonds is most accurate?
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A
It is not appropriate for securities whose cash flows are path dependent
B
The greater the number of paths, the closer the model is to the security's fundamental value
C
A probability distribution and a volatility assumption are needed to generate interest rate paths
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