Scenario analysis


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Scenario analysis

The use of horizon analysis to project total returns under different reinvestment rates and future market yields.

Scenario Analysis

In risk analysis, the process of considering different, possible outcomes of a decision. Scenario analysis may take a number of forms; for example, a company may consider the various potential returns on an investment and how each will affect the company's other business. Scenario analysis can also be used in policy making: the president can weight potential effects of a tax increase when deciding whether or not it would be beneficial to do so.
References in periodicals archive ?
When clients are overwhelmed by future uncertainty, scenario analysis provides them reasonable assumptions for creating a narrative for future outcomes based on specific steps taken.
Scenario analysis is the tool to deal with an unpredictable future--and is possibility the next best thing to the crystal ball.
While sensitivity analysis measures sensitivity of project's NPV by varying one key variable at the time, scenario analysis constructs scenarios where several key variables change in each scenario.
Conditionality helps investors improve investment scenario analysis by better organizing the qualitative evidence collected in file folders, by using that evidence to better support the qualitative judgments, now written in a Word memo, and by using the judgments to automatically drive more scenarios than they create manually in Excel.
Specifically, such maps are less reliant on heroic assumptions about changes in political and economic systems than either forecasting or scenario analysis.
The system provides the firm with stress testing, scenario analysis, compliance checking, real-time Greeks and flexible reporting capabilities.
We have thus conducted a scenario analysis to evaluate the effects of an economic slowdown or recession on the fundamental value of Russian telecom and media stocks.
Based on the identified need for valid, reliable quantitative instruments measuring cognitive and affective aspects, three instruments were developed: a 20-item, polytomously-scored multiple choice questionnaire, a five item Interest Survey, and a written CT case scenario analysis.
Sensitivity analysis tweaks one variable at a time and evaluates the effect on the project's net present value, and scenario analysis examines a limited number of combinations of variables: worst-case (WC), most-likely-case (MLC), and best-case (BC) estimates of financial variables that determine future cash flows (e.
On iPhone, he says his worst case scenario analysis is that 10% of iPhoen subs might churn in 2011 if the company loses exclusivity; he thinks this risk is fully priced in.
Pitney Bowes MapInfo has recently introduced new data sets for their Risk Data Suite, which aims to address critical decisions with disaster scenario analysis and claim planning and preparedness.
They also can do scenario analysis using moveable graphics tied to each key performance indicator or driver and set alerts to detect conditions that warrant immediate attention.