Which of the following statements is most correct? Sensitivity analysis is a good way to measure market risk because it explicitly takes into account diversification effects. One advantage of...

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Extracted text: Which of the following statements is most correct? Sensitivity analysis is a good way to measure market risk because it explicitly takes into account diversification effects. One advantage of sensitivity analysis relative to scenario analysis is that it explicitly takes into account the probability of certain effects occurring, whereas scenario analysis does not consider probabilities. Simulation analysis is a computerized version of scenario analysis that uses continuous probability distributions of the input variables. O All of the statements are correct.