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Basic Question 12 of 13
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.
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I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
describe sensitivity risk measures and scenario risk measures and compare these measures to VaR;
demonstrate how equity, fixed-income, and options exposure measures may be used in measuring and managing market risk and volatility risk;
describe the use of sensitivity risk measures and scenario risk measures;
describe advantages and limitations of sensitivity risk measures and scenario risk measures;
CFA® 2025 Level II Curriculum, Volume 5, Module 41.