(CMA)A widely used approach that is used to recognize uncertainty about individual economic variables while obtaining an immediate financial estimate of the consequences of possible prediction errors is:

Question

Quizplus · Accepted Answer

Sensitivity analysis is a widely used approach that is used to recognize uncertainty about individual economic variables while obtaining an immediate financial estimate of the consequences of possible prediction errors. The technique involves analyzing the impact of changes in inputs, such as interest rates, exchange rates, or commodity prices, on the outcome of a financial model. This helps to identify the critical variables that are most likely to affect the results and allows managers to make more informed decisions about the risks associated with a particular project or investment. Expected value analysis, learning curve analysis, and regression analysis are all useful methods in their own right, but they do not provide the same level of insight into the potential impact of uncertainty on financial outcomes as sensitivity analysis.

(CMA)A Widely Used Approach That Is Used to Recognize Uncertainty