Agenda
In this session, you'll explore how risk and uncertainty affect investment decisions—a critical skill for Performance Management and Advanced Performance Management exams.
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In this lesson
- 0:00 Risk and uncertainty in investment appraisal
- 0:08 Distinguishing risk from uncertainty
- 0:16 Probability analysis and expected values
- 0:23 Sensitivity analysis and estimate changes
- 0:32 Other risk techniques overview
About this lesson
You'll learn to distinguish between risk and uncertainty, then work through four essential techniques: probability analysis and expected values, sensitivity analysis to test how estimate changes impact decisions, and advanced methods including simulation, risk-adjusted discount rates, and adjusted payback. By the end, you'll have a complete toolkit for appraising investments under real-world conditions where outcomes are rarely certain.
Duration: 1m
Transcript
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