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LOS d: Explain how sensitivity analysis, scenario analysis, and Monte Carlo simulation can be used to assess the stand-alone risk of a capital project.
Q1. Which of the following statements is most accurate?
A) A company that does not adjust the discount rate for differences in project risk is likely to accept an excessive number of low risk projects.
B) In a graphical depiction of sensitivity analysis, the project with the steeper line would be considered most risky, because a small error in estimating a variable, such as unit sales, will produce a large error in the net present value's prediction.
C) The financial manager of a large corporation should view stand alone risk as most important because of its impact on debt capacity, credit worthiness, and job stability.
Q2. Which of the following statements about risk analysis techniques is least accurate?
A) In sensitivity analysis, the dependent variable is plotted on the y-axis and the independent variable on the x-axis. The steeper the slope on the resulting line the less sensitive the dependent variable is to changes in the independent variable.
Q3. Which of the following statements about Monte Carlo simulation is FALSE? Monte Carlo simulation:
A) is the most accurate risk analysis tool because it is based on real data.
B) can be useful for estimating the stand-alone risk of a project.
C) is capable of using probability distributions for variables as input data.
Q4. Which of the following statements about sensitivity analysis is least accurate?
A) Sensitivity analysis starts with the best-case scenario.
B) The steeper the slope of the NPV versus the variable, the more sensitive the output variable is to a change in the input variable.
C) Sensitivity analysis alters a single independent variable to determine the impact on the output variable.
Q5. Which of the following simulation techniques computes as many as 1,000 net present values, based on multiple values for each cash flow?
A) Sensitivity analysis.
B) Scenario analysis.
C) Monte Carlo simulation.
Q6. Define sensitivity analysis and Monte Carlo simulation.
Sensitivity analysis is: Monte Carlo simulation
A) when a firm looks at the sensitivity of only one
variable, holding all others constant. uses historical values from which
repeated samples are drawn.
B)when a firm looks at the sensitivity of only one
variable, holding all others constant. assumes a specified distribution to generate
random samples in order to estimate true
distribution parameters.
B) when a firm looks at the sensitivity of many
variables, holding some constant. assumes a specified distribution to generate random
samples in order to estimate true distribution parameters.
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发表于 2009-3-4 09:53
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