Back-testing: related pages

A useful technique for financial modelling that uses random inputs to model uncertainty.

The exaggeration of returns because calculations fail to include securities or markets that have ceased to existed.

A mathematical construct that can range from a simple formula (such as PE) to complex computer programs that may take days to run.

Price changes in securities that are (a priori) purely random. Expected behaviour in efficient markets.

The risk that a model may produce incorrect results.