CAPM (Certified Associate in Project Management) Practice Exam

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What is the Monte Carlo technique?

  1. A game theory strategy

  2. A deterministic forecasting model

  3. A project model computed many times with random input values

  4. A static financial analysis tool

The correct answer is: A project model computed many times with random input values

The Monte Carlo technique is a project management tool that involves running simulations with random input values to assess the possible outcomes of a project. By using this technique, project managers can gain insights into the likelihood of different project scenarios and make more informed decisions. Option A is incorrect because the Monte Carlo technique is not related to game theory. Option B is not correct as the Monte Carlo technique is not a deterministic forecasting model since it involves randomness in the input values. Option D is also incorrect as the Monte Carlo technique is not a static financial analysis tool but a dynamic simulation method for project modeling.

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