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Sensitivity Analysis Quiz
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Sensitivity Analysis Quiz

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@StaunchTan

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Questions and Answers

What is the purpose of sensitivity analysis?

  • To understand the impact of risks assumptions on interest rates
  • To build sensitivity tables in Excel
  • To test the impact of changing assumptions on returns and key metrics (correct)
  • To evaluate investment risk using sensitivity tables
  • What is the difference between 1-sided and 2-sided sensitivity tables?

  • 1-sided tests the impact of 1 assumption, while 2-sided tests the impact of 2 assumptions
  • 1-sided tests 1 output, while 2-sided tests unlimited outputs
  • 1-sided tests 2 variables simultaneously, while 2-sided tests 1 variable at a time
  • 1-sided tests unlimited outputs, while 2-sided tests 1 output (correct)
  • What does a 2-sided sensitivity table test?

  • The impact of 1 assumption
  • 1 output based on 2 assumptions (correct)
  • 1 variable at a time
  • Unlimited outputs based on 1 assumption
  • What is the main focus of evaluating risk with sensitivity tables?

    <p>Evaluating the impact of changing assumptions on returns and key metrics</p> Signup and view all the answers

    What type of sensitivity table tests the impact of changing one variable only?

    <p>1-sided sensitivity table</p> Signup and view all the answers

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