Risk Analysis is a critical evaluation designed to indicate how sensitive an investment is to changes in underlying future conditions. This process may include assessing the volatility of the investment and simulating potential outcomes based on different economic scenarios.
Sensitivity analysis is a method used in investment analysis to determine how different values of key variables impact the outcomes of an investment. This technique helps in assessing the riskiness of an investment by testing how changes in assumptions affect investment results.
Simulation in real estate involves artificially replicating the behavior of a system for future analysis, enabling informed decision-making and planning based on various scenario testing.
