Financial model: Difference between revisions
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imported>Doug Williamson (Update.) |
imported>Doug Williamson (Update and add link.) |
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A simplified representation of a financial situation, using a selected set of assumptions and relationships. | A simplified representation of a financial situation, using a selected set of assumptions and relationships. | ||
Financial models are widely used | Financial models are widely used in practice for valuation and to support financial decisions and risk management. | ||
Models are also a valuable tool in finance coaching and financial education. | |||
In simple terms, a model: | In simple terms, a model: | ||
*Presents a financial calculation (or calculations) | *Presents a financial calculation (or calculations) | ||
*In a way that enables the user to understand it and to challenge it, especially about | *In a way that enables the user to understand it and to challenge it, especially about its assumptions. | ||
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* [[Financial modelling]] | * [[Financial modelling]] | ||
* [[Model]] | * [[Model]] | ||
* [[Risk management]] | |||
* [[Rounding]] | * [[Rounding]] | ||
* [[Simulation]] | * [[Simulation]] | ||
* [[Stochastic]] | * [[Stochastic]] | ||
Revision as of 04:15, 31 December 2016
A simplified representation of a financial situation, using a selected set of assumptions and relationships.
Financial models are widely used in practice for valuation and to support financial decisions and risk management.
Models are also a valuable tool in finance coaching and financial education.
In simple terms, a model:
- Presents a financial calculation (or calculations)
- In a way that enables the user to understand it and to challenge it, especially about its assumptions.
