The analyst waited anxiously at his computer and finally the answer appeared - he would need 57 chickens to fund his retirement plan.Still, he had some nagging doubts about some assumptions he had made and he wondered how much faith he should put into the answer of 57.In order to test how reliable the figure 57 is, the analyst should conduct
A)simulation.
B)shock tests.
C)sensitivity analysis.
D)focus groups.

Question

Quizplus · Accepted Answer

Sensitivity analysis would allow the analyst to test the reliability of the figure 57 by examining how changes to various assumptions affect the result. This will give a better understanding of the range of likely outcomes, and whether the figure of 57 is a robust estimate. Simulation could also be helpful, but it would involve more extensive calculations and may not be necessary for this scenario. Shock tests and focus groups are unrelated to this type of analysis.

The Analyst Waited Anxiously at His Computer and Finally the Answer