Stress test

Stress testing is a form of scenario analysis in which worst case data are input into a financial model.

The idea is to test whether creditworthiness - or any other attribute being modelled - is robust enough to survive the selected 'worst case' scenario.

Stress testing necessarily involves a significant degree of judgement and subjectivity in identifying the appropriate worst case inputs with which to run the stress test.

See also

• Back test
• Model
• Reverse stress test
• Scenario analysis
• Sensitivity analysis