Question
Which of the following examples is an illustration of the concept the Flaw of Averages as discussed in the video lectures? Group of answer choices
Which of the following examples is an illustration of the concept the "Flaw of Averages" as discussed in the video lectures?
Group of answer choices
A) Building a simulation model that only uses normal distributions for input variables that do not reflect the true averages.
B) Using a point estimate like the mean or median for the rate of return in a financial calculation when the true rate of return is variable.
C) Solving a simulation model with so many trials that Excel is unable to converge to a solution.
D) Using the average to summarize the results of a simulation model instead of the median when data values are heavily skewed.
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