Property risk assessment: a simulation approach.

Appraisal Journal, September, 2006 by Slade, Barrett A.

abstract

Simulation analysis leads to greater insights into the risk characteristics of Investment properties by explicitly recognizing that many input assumptions are uncertain. It allows the analyst to realistically model this uncertainty and estimate the likelihood of an investment outcome. Compared to traditional risk assessment techniques, simulation analysis allows the investment decision maker to be much more informed. By applying modern simulation analysis to the investment analysis of an apartment property, this article illustrates the comparative advantages of modern risk assessment techniques over traditional methods.

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Business schools teach students that risk is the possibility that an investment's actual return may be...

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