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What are the benifits of sensitivity analysisSolutionA techniq

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what are the benifits of sensitivity analysis
Solution
A technique used to determine how different values of an
independent variable will impact a particular dependent
variable under a given set of assumptions. This technique
is used within specific boundaries that will depend on one
or more input variables, such as the effect that changes in
interest rates will have on a bond\'s price.
Sensitivity analysis is a way to predict the outcome of a
decision if a situation turns out to be different compared to
the key prediction(s).
I
Sensitivity analysis is very useful when attempting to
determine the impact the actual outcome of a particular
variable will have if it differs from what was previously
assumed. By creating a given set of scenarios, the analyst
can determine how changes in one variable(s) will impact
the target variable.
For example, an analyst might create a financial model
that will value a company\'s equity (the dependent

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what are the benifits of sensitivity analysis Solution A technique used to determine how different values of an independent variable will impact a particular dependent variable under a given set of assumptions. This technique is used within specific boundaries that will depend on one or more input variables, such as the effect that changes in interest rates will have on a bond \'s price. Sensitivity analysis is a way to predict the outcome of a decision if a situation turns out to be different compared to the key prediction(s). I Sensitivity analysis is very useful when attempting to determi ...
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