ASC ASC Sensitivity and Scenario Analysis 2

Question 1

When running a two-variable sensitivity table in ARGUS, the analyst is testing:

Accepted Answer

How two inputs jointly affect a single output metric

Answer

A two-variable sensitivity table displays how combinations of two assumption changes (e.g., rent growth and exit cap rate) affect a single output like IRR.

Question 2

In ARGUS, a downside scenario typically includes which adjustments?

Accepted Answer

Lower rent growth, higher vacancy, and a higher exit cap rate

Answer

A downside scenario models pessimistic conditions: slower rent growth, higher vacancy, and an expanded exit cap rate that reduces sale proceeds.

Question 3

What is the purpose of stress testing a real estate model in ARGUS?

Accepted Answer

To evaluate property performance under extreme adverse conditions

Answer

Stress testing pushes assumptions to extreme negative values to determine how much deterioration the investment can withstand before failing underwriting thresholds.

Question 4

In ARGUS, sensitivity analysis on market rent growth would most directly impact which line item?

Accepted Answer

Effective gross income

Answer

Market rent growth assumptions directly drive future rental revenue, affecting effective gross income and all downstream cash flow and return metrics.

Question 5

Which of the following is NOT a typical variable tested in an ARGUS sensitivity analysis?

Accepted Answer

Tenant's personal FICO score

Answer

Tenant FICO scores are personal credit metrics unrelated to ARGUS's property-level cash flow modeling assumptions.

(ASC) Argus Software Certification Practice Test

(ASC) Argus Software Certification Practice Test

ASC ASC Sensitivity and Scenario Analysis 2