- CFA Exams
- CFA Exam: Level II 2021
- Study Session 3. Quantitative Methods (2)
- Reading 9. Excerpt from Probabilistic Approaches: Scenario Analysis, Decision Trees, and Simulations
- Subject 3. An overall assessment of probabilistic risk assessment approaches

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**CFA Practice Question**

The double-counting risk in the reading refers to:

B. combining sequential risk and concurrent risk.

C. using a risk-adjusted discount rate and considering the variability in estimated value as a risk measure.

A. using the variability in simulated values as the risk measure, without considering the diversifiable risk.

B. combining sequential risk and concurrent risk.

C. using a risk-adjusted discount rate and considering the variability in estimated value as a risk measure.

Correct Answer: C

The double-counting risk here refers to counting the same type of risk twice.

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