Explanation

Following are the ways to assess the stand-alone risk of a project:

Sensitivity analysis: It involves measurement of change in net present value corresponding to a change in a single input variable.
Scenario analysis: It involves measurement of change in net present value corresponding to change in more than one variable.
Monte carlo simulation: It assesses the standalone risk by combining the sensitivity analysis, probability distribution and correlation between the input variables.

Verified Answer

Stand-alone risk can be assessed using sensitivity analysis, scenario analysis and monte carlo simulation.