Scenario analysis
Scenario analysis evaluates possible outcomes under a defined set of assumptions about market or economic conditions. Scenarios may be favourable, neutral, or adverse and can combine several changes; they are conditional illustrations, not forecasts or assigned probabilities unless explicitly stated.
In a hypothetical exercise, an analyst compares a currency portfolio under falling, unchanged, and rising interest rates while also varying assumptions about exchange rates.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Glossary definitions are general education only and are not investment advice. Risk disclosure