Analysis

Question 1

Advantages of linear regression models

Answer 1

Simple to use easily explained
Can be used to predict impact from changes in estimates

Question 2

Limitations of liner regression

Answer 2

Not always a relationship between variables and outcomoes
Less meaningful if info is inaccurate

Question 3

Advantages of decision trees

Answer 3

Simple to explain logical

Question 4

What is monte carlo simulation

Answer 4

Looks at the impact of many variables changing instead of oneA

Question 5

Advantages of monte carlo simulation

Answer 5

Provides more info about possible outcomes and sensitivites
Useful for problems that cannot be solved analytically

Question 6

Disadvantages of monte carlo simulation

Answer 6

Does not identify a correct decisions
Time consuming and complex
Expensives
Assumptions used

Question 7

What is standard deviation

Answer 7

How far on average each result lies from the mean.
Lower = lower risk

Question 8

Coefficient of variation

Answer 8

Standard deviation as a % of mean
Higher %, results more unpredictable

Question 9

Normal distribution

Answer 9

Frequency distribution that is symmetrical around the mean