Which One of the Following Statements Concerning Scenario Analysis Is

question 137

Multiple Choice

Which one of the following statements concerning scenario analysis is correct?

• A) Under the best-case scenario, total costs will be at their anticipated minimal level.
• B) Under the worst-case scenario, fixed costs will be at the minimal expected level.
• C) Under the base case scenario, sales will be at the highest level that is reasonably expected.
• D) Using scenario analysis, you can determine the forecast risk associated with sales.
• E) Scenario analysis concentrates on the changes in net income as variables move within reasonably expected ranges.

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Definitions:

Likelihood

A statistical measure of how probable a particular set of observations is, given a model or hypothesis, often used in the context of estimating parameters in statistical models.

Hypothesis

A proposed explanation for a phenomenon, made as a starting point for further investigation.

Event

An occurrence or happening, particularly one of significance in statistics or probability.

Action

The process or state of acting or being active.