PFMP · Question #576
In a portfolio, data is an abundant asset, and managing the information aiming for a a better decision making is critical. For this you use a variety of Quantitative and Qualitative analysis…
The correct answer is D. Performing Quantitative analysis and Sensitivity analysis. During portfolio risk assessment and risk response planning, Quantitative Analysis (e.g., Monte Carlo simulation, expected monetary value) and Sensitivity Analysis (e.g., tornado diagrams) are the appropriate techniques. Quantitative analysis assigns numerical values to risk…
Question
In a portfolio, data is an abundant asset, and managing the information aiming for a a better decision making is critical. For this you use a variety of Quantitative and Qualitative analysis methods. These methods are performed in 4 of the portfolio management processes and serve a slightly different purpose in each and every one of them. Considering that you are currently performing risk assessment and handling risk responses, how can you make use of the quantitative and qualitative analysis?
Options
- APerforming resource leveling, project sequencing techniques and dependency analysis
- BPerforming Cost-benefit analysis, quantitative analysis, scenario analysis, probability analysis,
- CPerforming Status and trend analysis, Rebalancing methods, Investment choice tools, exposure
- DPerforming Quantitative analysis and Sensitivity analysis
How the community answered
(22 responses)- A9% (2)
- B5% (1)
- C5% (1)
- D82% (18)
Explanation
During portfolio risk assessment and risk response planning, Quantitative Analysis (e.g., Monte Carlo simulation, expected monetary value) and Sensitivity Analysis (e.g., tornado diagrams) are the appropriate techniques. Quantitative analysis assigns numerical values to risk probability and impact, while sensitivity analysis identifies which risks have the greatest potential effect on the portfolio. Option A describes scheduling and dependency tools, Option B describes financial analysis tools used in portfolio component selection, and Option C describes performance monitoring tools - none of which are primarily used in the risk assessment and response planning context.
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