A common approach of estimating the variability of returns involving forecasting the pessimistic, most likely, and optimistic returns associated with the asset is called
A) marginal analysis.
B) sensitivity analysis.
C) break-even analysis.
D) financial statement analysis.

Question

Quizplus · Accepted Answer

The common approach of estimating the variability of returns involving forecasting the pessimistic, most likely, and optimistic returns associated with the asset is called sensitivity analysis. Marginal analysis refers to the analysis of the additional benefit or cost of an extra unit. Break-even analysis is the calculation of the point at which revenue received equals the costs associated with producing and selling a product. Financial statement analysis is the process of analyzing the financial statements of a company to make decisions about the company's financial health.

A Common Approach of Estimating the Variability of Returns Involving