Global Definitions Database

The process of estimating the expected value of a portfolio after a given period of time, assuming specific changes in the values of the portfolio's securities or key factors take place, such as a change in the interest rate; commonly used to estimate changes to a portfolio's value in response to an unfavorable event and may be used to examine a theoretical worst-case scenario; can be used to examine the amount of risk present within a given investment as related to a variety of potential events, ranging from highly probable to highly improbable; output of analysis is only as good as the inputs and assumptions made by the analyst.