CFA Practice Question

There are 131 practice questions for this study session.

CFA Practice Question

Sensitivity analysis is:

A. The NPV when sales and other input variables are set equal to their most likely values.
B. A risk analysis technique that considers both the sensitivity of NPV to changes in key variables and the likely range of variable values.
C. A risk analysis technique that considers the sensitivity of NPV to changes in key input variables.
D. The NPV when "bad" and "good" sets of financial circumstances are compared.
Correct Answer: C

Sensitivity analysis indicates how much the net present value of an investment project will change in response to changes in an input variable.

User Contributed Comments 1

User Comment
antarctica b and d refer to scenario analysis
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