Thank you in advance!!
On the part of measures of risk they Schweser says this:
- Stress testing: examines the effects of a specific (usually extreme) change in a key variable (interest rate, f.e.). A change in a single input.
- Scenario analysis: “what if” analysis of expected loss but incorporates changes in multiple inputs.
In Ratio analysis they say this:
sensitivity analysis: “what if questions” one variable
Scenario analysis: based on specific scenarios, we will yield a range of value for specific elements
THEN, they mixed up right, I assume the following:
scenario analysis is multivariate, right?
sensitivity: one variable, what if questions
stress testing: also multivariate but I dont know the difference between it and scenario