Discussion
In MS Excel, what is a circular reference?
Answer: C
Correct answer: A formula that refers, directly or indirectly, to its own cell
A circular reference occurs when a formula depends on its own cell, either directly - =A1+1 typed into A1 - or through a chain that eventually comes back to it. Excel cannot resolve it, since the answer would depend on itself, so it displays a warning, shows zero, and names the offending cell in the status bar. The full list is found under Formulas, Error Checking, Circular References. The usual cause is accidental: a SUM formula placed inside the range it is adding, most often at the bottom of a column where the range was extended one row too far. Deliberate circularity is possible where a genuinely iterative calculation is intended, by enabling Iterative Calculation in Excel’s options and setting a maximum number of iterations and a change threshold. That is used for engineering and financial models that converge, and should not be left on by default, since it silently masks accidental circular references.
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