Which of the Following Options Highlights a Key Benefit of Scenario

question 30

Multiple Choice

Which of the following options highlights a key benefit of scenario analysis when compared with sensitivity analysis?

• A) It considers situations in which many variables change at the same time.
• B) It highlights factors that managers may previously not have considered.
• C) It calculates the probability of various outcomes.
• D) It focuses on the effect of changes in a single variable.

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Definitions:

Identification

The process of determining or establishing the identity of a person or thing.

Risk of Loss

Refers to the possibility that an asset's value could decrease due to a variety of factors, potentially resulting in financial loss for the holder.

Title

The legal right to own, use, or dispose of property; often evidenced by a document.

Insurable Interest

(1) In contract law, a property interest in goods being sold or leased that is sufficiently substantial to permit a party to insure against damage to the goods. (2) In the context of insurance, an interest in a person’s life or well-being that is sufficiently substantial that insuring against the person’s death or injury does not amount to a mere wagering contract.