Financial model: related pages
Back-testing The testing of a financial model by using it on past date and then comparing the 'predictions' to what actually happened.
Monte-Carlo simulation A useful technique for financial modelling that uses random inputs to model uncertainty.
Black-Scholes The most widely used method of option valuation. More complex models are sometimes necessary as it uses a number of simplifying assumptions.
CAPM A method of valuing securities or an investment using a discounted cash flow (DCF) using a risk adjusted discount rate.
Dividend discount model A financial model that values shares at the discounted value of future dividend payments. This is theoretically the most correct way of valuing shares.
Model risk The risk that a model may produce incorrect results.
Copyright Graeme Pietersz © 2005-2019
