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Basic Question 12 of 13
What is a limitation of sensitivity analysis?
B. It does not often distinguish assets by volatility.
C. It assumes a normal distribution of returns.
A. It needs to rely on history.
B. It does not often distinguish assets by volatility.
C. It assumes a normal distribution of returns.
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I was very pleased with your notes and question bank. I especially like the mock exams because it helped to pull everything together.
Martin Rockenfeldt
Learning Outcome Statements
describe sensitivity risk measures and scenario risk measures and compare these measures to VaR;
demonstrate how equity, fixed-income, and options exposure measures may be used in measuring and managing market risk and volatility risk;
describe the use of sensitivity risk measures and scenario risk measures;
describe advantages and limitations of sensitivity risk measures and scenario risk measures;
CFA® 2025 Level II Curriculum, Volume 5, Module 41.