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What is the purpose of sensitivity analysis?
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?
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?
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?
What is the main focus of evaluating risk with sensitivity tables?
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What type of sensitivity table tests the impact of changing one variable only?
What type of sensitivity table tests the impact of changing one variable only?
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