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Why should scenario analysis be used to assess the potential performance of a trade before the trade is implemented? Because scenario analysis: A. consists of evaluating the worst-case scenario which enables an investor to know his highest potential loss of a trade. B. involves measuring the reactions of market participants under a variety of different scenarios which the manager needs to know before he makes a trade. C. identifies the range of possible outcomes and therefore provides the manager with a feel for the risk associated with a trade. |