- CFA Exams
- CFA Level I Exam
- Topic 9. Portfolio Management
- Learning Module 42. Measuring and Managing Market Risk
- Subject 2. Other Key Risk Measures
CFA Practice Question
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.
Correct Answer: B
Sensitivity analysis does not need to rely on history or assume a normal distribution.
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