[Anonymous]

Although the actual material covered in BEC is probably the easiest of all 4 sections (my opinion), I have found the actual language/wording used in the questions to be downright convoluted. For example, take a look at this questions from Capital Budgeting (For the record I have an M.S. in Statistics):

Which of the following best describes sensitivity analysis?

1. A technique that explores the importance of assumptions underlying a forecast.

2. A technique that explores the effect of simultaneous changes in a group of variables.

3. A technique that recognizes the multiple decisions that are involved in implementing a project.

4. A technique that views an investment as purchasing an option.

The correct answer is 1, however; it is not a very good description of the purpose of sensitivity analysis. Something like “A technique that explores the effects that changes in the underlying independent variables have on the outcome or response variable”.

The problem with this answer is that it is just a bad answer (or response). All statistical/economic models use assumptions, however, not all of them are present in the actual model in variable form.

Frustrating…

[M.O.D.]

Sensitivity analysis is broadly covered on the CMA exam so I am familiar with the concept.

Keyword being: assumptions

I am not sure that the assumptions need be quantifiable, traditional variables. They can be the behavior of managers/bosses, the behavior of the consumers, the behavior of the stock market, the Federal Reserve, the behavior of competitors, etc.

Sensitivity analysis makes you questions all your assumptions, to see if anyone of them would throw your model really askew.

The reasons it is called sensitivity, because it measures how sensitive your model is to your assumptions.

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[How many letters do you need]

That is a weird one. I think the trick with these types of questions are to pick the best answer, not necessarily the one that fits. I eliminate the worst two and coin flip if needed. It's been a couple months but I seem to recall most of the BEC MCQs were fairly straight forward. ….

MBA,CMA,CPA, CFF?, ABV?

[Tux]

I agree –

I know nothing about statistics or sensitivity analysis, but I'm working on the IT section now….

COBIT Information criteria – Integrity, Reliability, Availability, Effectiveness, Efficiency – the descriptions of each are not obvious at all. I have no idea how to remember the characteristics of each, when each characteristic seems like it would apply to any and/or all of them.

How to remember this stuff?????

FAR - 86 - 2/27/14
AUD - 75 - 5/29/14
BEC - 80 - 8/31/14
REG - 89 - 2/27/15
Praise Jesus! I'm done!!

Study resources:
Becker
Wiley test bank

[Anonymous]

The actual Wiley Test Bank answer provided the real definition, which was:

“Sensitivity analysis explores the importance of variables by manipulating variables one at a time to determine their importance to the forecast.”

This is a very clear concise definition. If this was an answer choice, i cannot foresee many getting this question incorrect.

My point is this: given the vast amount of material we already have to learn (and in some cases just straight up memorize, i.e. COSO), why intentionally poorly word reposes to make the material even more difficult?

I did actually get the question correct.

Venting… 🙁

[vlc1982]

I feel your pain. I'm doing Ninja MCQ for BEC right now and I swear I came across two questions whose correct answers straight up contradicted each other. I think they were on profitability index. I've also seen a few where the explanation given (after I submitted my answer) matches almost verbatim to the answer I chose, but it ended up being wrong due to one word or some very vague hypothetical. We are in hell.

FAR 66, 80
AUD 86
REG 76
BEC 74, 77 - DONE!!

Yaeger, Ninja MCQ for BEC
TX Candidate

[Author]

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