SCENARIO ANALYSIS OF RISKS OF RESIDENTIAL PROPERTY CONSTRUCTION PROJECT
V.V. Nazarova, E.V. Morozova
National Research University Higher School of Economics, Union printers str., 16, St. Petersburg, 190008
Keywords: scenario approach, risk assessment, investment project, real estate market, investment efficiency
Abstract
Current real estate market conditions with uncertain price trends and contradictory forecasts imply the following: precise level and probability of losses as well as effective risk management decisions might be achieved only with integrated approach. The paper examines and implements combining sensitivity analysis, decision tree, Monte Carlo simulation and scenario analysis in one risk assessment algorithm. According to the developed algorithm the risks of real estate development project were estimated and necessary recommendations were formulated.
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