What are the basic criteria for selecting a forecasting model?

Q: Which Variable Is most critical in Sensitivity Analysis?

A: Sensitivity analysis helps to analyze the project by considering different variables. It helps…

Q: Explain the types of risk?

A: Introduction: There is a risk involved in any company decision, and in personal life decisions. In…

Q: Define the Base Case and the Proposed Alternatives?

A: The base case is the output expected from the basic assumption made by the project team. The basic…

Q: What is forecast horizon?

A: Forecasting refers to the process where estimation about the future events is determined in advance…

Q: What are risk assessments?

A: Risk assessment means identification of risk faced by a business organization that hampers it from…

Q: What is Scenario Analysis?

A: Scenario analysis is an important step in the financial modelling. This is used to show the possible…

Q: What is preliminary prospectus?

A: Preliminary prospectus is the first document submitted by a company which plans for initial public…

Q: What are the different variables in sensitivity analysis?

A: Answer: Under a given set of expectations, a sensitivity analysis describes the way different values…

Q: Why do we need stress testing and scenario analysis?

A: A stress test or scenario analysis is used to determine and analysis the outcome of a financial…

Q: What is the balanced scorecard?

A: Balanced scorecard is basically a way of managing things even with the non financial aspects of a…

Q: The scenario analysis technique is versatile and rich. Of all the forecasting techniques, it may be…

A: Scenario analysis - It is mainly used to analyse the pros and cons of  organisational decisions. In…

Q: What techniques can be used to analyze real options?

A: A choice accessible to the organization's managers related to the investment opportunities is known…

Q: What are the steps in computing the cost of a prediction error when using the EOQ decision model?

A: Economic Order Quantity (EOQ): Economic order quantity is the quantity of order that is purchased…

Q: What alternative approaches can be used to estimate variable consideration?

A: The alternative approaches that can be used to estimate variable consideration are: Expected value…

Q: What is the trend analysis?

A: Trend analysis is a procedure utilized in the technical investigation that expects to figure future…

Q: How will you collect, classify and present statistical data?

A: For statistical analysis, there are several methods used to gather or collect data. Three of the…

Q: What role does MAD play in evaluating a forecasting model?

A: MAD refers to mean absolute deviation. It is also known as average absolute deviation which is the…

Q: what are the basic models for short-term forecasting and the basic characteristics of the models?…

A: Short-term projections are typically created for tactical reasons such as production planning and…

Q: suitable behavioral model?

A: Behavioral Model: Behavioral Model from its name only suggests the study of behavior. The study of…

Q: What is a trend analysis, and what information does it provide?

A: Trend analysis is the widely used concept in the financial markets to predict the movement of the…

Q: What is risk and give examples

A: While making investment decisions risk and return should be taken into consideration.

Q: How is the ERC (efficient response coefficient) determined and which role analyst forecasts play in…

A: The earnings response coefficient, or ERC, is a calculated ratio between stock returns and the…

Q: Compare judgmental, time series, and causal forecasting models.

A: Judgmental models are the subjective criteria in which gauges are based on master ideas. Individuals…

Q: what formula did you use to calculate PVIFA?

A: The acronym PVIFA stands for the present value interest factor. The present value interest factor is…

Q: Differentiate between sensitivity analysis and scenario analysis.What advantage does scenario…

A: Differentiate between sensitivity analysis and scenario analysis: Scenario analysis involves…

Q: What is a sensitivity analysis, and how does it work? Can you provide an illustration of this?

A: Here is the Answer

Q: Explain Expectations Theory?

A: Expectations theory attempts to predict what short-term interest rates will be in the future based…

Q: Calculate the risk neutral probability

A: Risk neutral probability = (er*Δt - d)/(u-d) r is risk free rate. Δt is time period between each…

Q: Define the term risk?

A: Types of risk: Investment risk Market risk Inflation risk Business risk Liquidity risk

Q: Standard deviation measures which type of risk?

A: Standard deviation is an important measure of risk in finance.

Q: What term refers to the uncertainty inherent in projections of future ROIC?

A: Business risks are risks of uncertainty for the company. This is a type of risk where the returns…

Q: Explain Measures of Variance and Risk?

A: Variance tests normal or normal variability. Variability is volatility for investors, and volatility…

Q: What are some strengths and weaknesses of sensitivity analysis and scenario analysis?

A: Sensitivity Analysis determines how the dependent variable changes when the independent variable…

Q: What should be done to apply rate-of-return analysis correctly?

A: Rate of return: It can be defined as the rate of interest that has been earned by the company on the…

Q: What is the general goal of trend analysis?

A: Trend analysis:   Trend analysis is prepared to make comparison between the previous year's…

Q: When developing forecasts, analysts should most likely :C . aim to develop extremely precise…

A: In any business, there are complex situations in which the analysis is required to be done to take…

Q: What are the two stages in risk assessment?

A: Risk assessment is the process which involves analysis & identification of events that can have…

Q: What are some pros and cons of computing an expected return using a user-specified model versus…

A: Expected Return: As opposed to observed returns that are measured at the end of a given period, the…

Q: What important information does a trend analysis provide?

A: The concept being asked is Trend Analysis which is a very broad topic. Therefore, I am explaining…

Q: What risk does Beta measure?

A: There are two types of risks: 1) Systematic risk 2) Unsystematic risk 1. Systematic risk : It is…

Q: What is the relationship between risk and return?

A: Risk return relationship: The association among risk and return is recognized as the risk-return…

Q: what does the sensitivity analysis look like?

A: Sensitivity analysis:Sensitivity analysis is a process of evaluating how various values of an…

Q: What are the principles of finacial forecasting?

A: Financial forecasting as the word implies is the prediction or estimation of how the business…

Q: Provide one example of a calculation of risk and discuss its significance.

A: Risk is a chance that the actual gain or outcome from the investment will differ from the expected…

Q: For any given distribution of outcomes and probabilities, describe how preferences over risk affect…

A: An outcome is a potential result of an experiment in probability theory. The likelihood of an event…