a) Explain what sensitivity analysis is giving examples of how a financial institution will use it. Discuss the difference between sensitivity analysis and scenario analysis. (10 Marks) b) Guarantees are a key element of project finance. This is because of the huge amounts in question and the relatively limited balance sheet sizes of the project sponsors whose capitalization ratios would be adversely impacted. Guarantees enable promoters to move the financial risk of a project 'off the balance sheet to one or more third parties. They thus provide a basis for shifting certain project finance risks to interested parties who do not want to take a direct financial commitment or provide funds to the project. Identify 5 types of guarantees and explain how they are used. (15 Marks) (Total 25 Marks)