The risk measurement approach that examines the impact of a change in the value of a variable on a selected outcome variable, assuming all other variables are held constant is known as sensitivity Analysis.
<h3>What is meant by sensitivity analysis?</h3>
Sensitivity analysis is the study of how different sources of input uncertainty can be split and assigned to the output uncertainty of a mathematical model or system.
Sensitivity analysis is a type of financial model that assesses the impact of changes in input variables on target variables. This model is also known as a simulation analysis or a what-if model. It is a technique for forecasting a decision's outcome given a set of relevant factors.
Sensitivity Analysis is a method of risk measurement that considers the effects of changing one variable's value on a particular outcome variable while maintaining the same values for all other variables.
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Answer:
The firm that will have a higher beta is:
Firm B.
Explanation:
The question here is which firm is more volatile. Since they have a similar amount of financial leverage, Firm B which uses more human workers on its assembly line and pays overtime will appear to be more volatile than Firm A with a highly automated robotics process. Firm B faces risks of labor strikes and other vagaries associated with the use of more labor than the market.
Answer:
future value of the video projection payment: 371.64 dollars
Explanation:
The future value of these payment will be calculate as ordinary annuity:
C $ 70
time 5 years
rate 3% = 3/100 = 0.03
FV $371.6395 = $ 371.64
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