Sensitivity analysis involves constructing a graph and then using simple algebra to determine the range of probability values when there are ______ states of nature.
A)two
B)three
C)four
D)five

Question

Quizplus · Accepted Answer

Sensitivity analysis involves constructing a graph called a tornado chart or spider chart. It is a one-way sensitivity analysis that shows how changes in one variable can affect the outcome. The graph is constructed for two states of nature, the best-case scenario and the worst-case scenario. Therefore, the answer is A, two.

Sensitivity Analysis Involves Constructing a Graph and Then Using Simple