Investing and Financial Markets
Research Papers
Example Sentences

What is a sensitivity analysis?

Top Answer
User Avatar
Wiki User
May 30, 2007 10:34AM

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.