Consider the following statement: Distributions can immediately be compared to each other without any standardization.

$$This statement is true.

$$This statement is false; a distribution must be normalized by regarding the expected value as zero.

$$This statement is false; a distribution must be normalized by measuring the deviation in terms of standard deviations, not in the original units.

$$Both Options $(2)$ and $(3)$ are correct.

$$Which of the following statements regarding investor risk tolerance is FALSE?

$$Low$-$risk portfolios are likely to contain speculative investments in residential development.

$$Property advisors have a greater duty to consider a client's risk tolerance for single projects than for on$-$going investments.

$$The lowest risk that a risk$-$seeking investor can obtain is the risk$-$free rate.

$$The relationship between risk and reward can be illustrated by a capital market line.

$6.$ Which of the following statements regarding sensitivity analysis is TRUE?

$$Each run of the simulation requires changing a single input variable while keeping the assumptions the same.

$$The focus should be on stable investment variables and their impact on net cash flow.

$$A sensitivity analysis involves adjusting many models for different sets of assumptions.

$$The main purpose of a sensitivity analysis is to isolate inconsequential variables from material variables.

$7.$ When conducting a Monte Carlo simulation, which of the following guideline$($s$)$ should be considered?

$$Do not perform simulations on the internal rate of return.

$$Try to use relatively independent control variables.

$$Use a risk$-$free discount rate.

$$All of the above.

$8.$ Computer$-$based sensitivity analysis software has allowed for which of the following to take place?

$$Eliminated the problem of inter$-$period dependency

$$Eliminated the problem of inter$-$variable dependency

$$Made sensitivity techniques accessible to most practitioners

$$Greatly increased the amount of time required to perform a sensitivity analysis