Worst-case scenario analysis develops a measure that computes, say, for one year's returns
A) The worst possible outcome for a portfolio in repeated trials of generating one-year portfolio outcomes.
B) The mean, over repeated trials of generating one-year portfolio returns, of the worst possible outcome in each trial.
C) The worst possible mean outcome for a portfolio in repeated trials of generating one-year portfolio outcomes.
D) The meanest possible outcome for a portfolio in repeated trials of generating one-year portfolio outcomes.

Question

Quizplus · Accepted Answer

Worst-case scenario analysis focuses on the average of the worst outcomes across multiple trials, not just a single worst outcome or meanest possible outcome.

Worst-Case Scenario Analysis Develops a Measure That Computes, Say, for One