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What is a sensitivity analysis?

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2007-05-30 10:34:02

Sensitivity Analysis is a type of analysis that shoes how a

particular scenario may be affected by multiple variables. For

example, one could model a home mortgage and run a sensitivity on

what happens if

  1. interest rates rise and/or
  2. property values decline

This can be done in tandem on a matrix along an x and y axis.

Sensitivity analyses are often done in spreadsheets such as excel.

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