Scenario analysis is different than sensitivity analysis:
A)because no economic forecasts are changed.
B)because several variables are changed together.
C)because scenario analysis deals with actual data versus sensitivity analysis which deals with a forecast.
D)because it is short and simple.
E)because it is a "by the seat of the pants" technique.

Question

Quizplus · Accepted Answer

Scenario analysis involves changing several variables together to analyze how different scenarios may impact the outcome, whereas sensitivity analysis focuses on changing one variable at a time to see how sensitive the outcome is to changes in that variable. Option A is incorrect because economic forecasts may be changed in both scenario and sensitivity analysis. Option C is incorrect because both types of analysis can deal with actual data or forecasts. Option D is incorrect because scenario analysis can be complex and detailed. Option E is incorrect because scenario analysis is a structured and systematic approach.

Scenario Analysis Is Different Than Sensitivity Analysis