Question
In: Finance
Suppose you run some tests to see how the share price behaves when you change some...
Suppose you run some tests to see how the share price behaves when you change some of the inputs and drivers utilized in arriving at that value. You keep all other variables the same and look at the isolated effect that each of the selected inputs has on share price. What are you doing?
A.) Performing scenario analysis
B.) Performing sensitivity analysis
C.) Performing Monte Carlo simulation
Solutions
Expert Solution
sensitivity analysis will be reflecting how the dependent variable would be reacting with the change in the value of independent variable within a particular set of assumptions.
Hence, when I am keeping all the other variable same and changing some of the input and looking at the isolated effect and it is performance of the sensitivity analysis.
Correct answer will be option ( b) performing sensitivity analysis
jeff jeffy answered 2 years agoRelated Solutions
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