With Sensitivity Analysis, Usually Only One Parameter Is Varied at a Time

question 37

Multiple Choice

With sensitivity analysis, usually only one parameter is varied at a time

• A)because the appropriate tools are not available to vary parameters simultaneously.
• B)because this best emulates "real world" scenarios.
• C)so as to simplify the procedure.
• D)so that the effect of each can be observed independently of all other parameters.
• E)so that the effect can be effectively monitored.

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Definitions:

Interest Rate

The percentage of a sum of money charged for its use, usually expressed as an annual percentage.

Net Capital Outflow

The difference between the domestic purchase of foreign assets and the foreign purchase of domestic assets.

Loanable Funds

The total amount of funds available in the financial markets for borrowing, which determines the market interest rates.

U.S. Grocery Chain

A set of related supermarkets or grocery stores operating under a similar brand or management in various locations across the United States.