- CFA Exams
- CFA Exam: Level II 2021
- Study Session 16. Portfolio Management (1)
- Reading 45. Measuring and Managing Market Risk
- Subject 2. Other Key Risk Measures
CFA Practice Question
The best way to determine how an option can behave under extreme market movements is to use ______.
B. Sensitivity analysis
C. Scenario analysis
A. VaR
B. Sensitivity analysis
C. Scenario analysis
Correct Answer: C
Scenario analysis focuses on extreme outcomes.
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