Question

In: Finance

Questions: Which of the following is the type of analysis you would most likely use to...

Questions:

  1. Which of the following is the type of analysis you would most likely use to assess the impact of arbitrary changes in the discount rate?

    A.Sensitivity analysis

    B.Scenario analysis

    C.Both

    D.Neither

  2. Which of the following is the type of analysis you would most likely use to assess the impact of an economic recession?

    A.Sensitivity analysis

    B.Scenario analysis

    C.Both

    D.Neither

  3. Because most of a company's value comes from the terminal period, we do not have to worry too much about near-term forecasts.
    Answer (True/False)

Solutions

Expert Solution

1) The correct answer is (A) Sensitivity analysis

Sensitivity analysis is where you tweak the one variable and see what is the impact of that on the outcome, so if you want to see what would be the outcome of the arbitrary changes in discount rates so you should be using sensitivity analysis.

Scenario analysis is when you want to change more than one input to see the impact so other option is not correct.

2) The correct answer is (B) Scenario analysis

Scenario analysis is more appropriate when you want to the impact of recession because for that you would have to change more than one input variable.

Sensitivity analysis is more appropriate when you want to change one variable so other options are not correct.

3) False

Terminal growth value is to at certain extent derived from the near-term growth so it is important to have correct estimation about the near term as well as terminal value forecast.

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

A. Which type of mutation do you feel would be most likely to be influenced by...
A. Which type of mutation do you feel would be most likely to be influenced by natural selection, those that result in changes of the third codon position, or those that result in changes of the first codon position? Explain your reasoning. B. In many animals inbreeding among close relatives reduces the ability of their offspring to survive. Explain why this occurs. Please correct answer. Thanks
A. Which type of mutation do you feel would be most likely to be influenced by...
A. Which type of mutation do you feel would be most likely to be influenced by natural selection, those that result in changes of the third codon position, or those that result in changes of the first codon position? Explain your reasoning. B. In many animals inbreeding among close relatives reduces the ability of their offspring to survive. Explain why this occurs.
A. Which type of mutation do you feel would be most likely to be influenced by...
A. Which type of mutation do you feel would be most likely to be influenced by natural selection, those that result in changes of the third codon position, or those that result in changes of the first codon position? Explain your reasoning.     B. In many animals inbreeding among close relatives reduces the ability of their offspring to survive. Explain why this occurs.
An audit team would be most likely to use attributes sampling in which of the following...
An audit team would be most likely to use attributes sampling in which of the following situations? Multiple Choice a. Performing analytical procedures during the planning stages of the audit. b. Evaluating management's integrity during the client acceptance process. c. Determining the effectiveness of the audit committee in evaluating the entity's control environment. d. Examining purchase requisitions for proper authorization.
Sharpe’s and Treynor’s. Which measure are you most likely to use ? What benchmark would you...
Sharpe’s and Treynor’s. Which measure are you most likely to use ? What benchmark would you choose to compare the performance? The use of the Sharpe’s ratio has been more mainstream. Sortino’s is rarely mentioned in undergrad textbooks; however, it is used by practitioners. Sortino’s Ratio is only penalizing for harmful volatility. In your opinion, do you think it would be appropriate to utilize this ratio? Would you use it to evaluate ?
P_1 Which of the following research situations would be most likely to use a between subjects...
P_1 Which of the following research situations would be most likely to use a between subjects research design? A. .Examining ethnic differences in reading comprehension among middle school children. B. Investigating the long-term effectiveness of a stop-smoking treatment by comparing participants craving for cigarettes after 2 months and 6 months of treatment. C. Examining academic performance of the Texas State University students by comparing their mean GPA to the national average GPA of undergraduate population in the U.S. D. All...
For which of the following product categories would you expect consumers to be most likely to...
For which of the following product categories would you expect consumers to be most likely to use price as a cue to quality: a plastic garbage can, an in-home electronic air cleaner, or a bottle of multiple vitamins? Explain your reasoning.
10. Which of the following research situations would be most likely to use an independent-measures design?...
10. Which of the following research situations would be most likely to use an independent-measures design? – 2pts a. Examine the development of vocabulary as a group of children mature from age 2 to age 3 b. Examine the long-term effectiveness of a stop-smoking treatment by interviewing subjects 2 months and 6 months after the treatment ends c. Compare the mathematics skills for 9th -grade boys versus 9th -grade girls d. Compare the blood-pressure readings before medication and after medication...
1. Which of the following goods would be the most likely to be subject to a...
1. Which of the following goods would be the most likely to be subject to a government-imposed tax? A Cereal B Bottles of alcohol, such as whiskey and gin C Shoes 2. Which of the following is likely to have the largest elasticity of supply? A The producer of vanilla ice cream B The producer of yachts C A dentist 3. Assume that as your income increases, your consumption of burgers decreases. We can assume that your income elasticity of...
Define a weather related derivative security. Describe the type of company that would most likely use...
Define a weather related derivative security. Describe the type of company that would most likely use one of these securities. Select a company that would use a weather derivative and explain how it will benefit from it.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT