Back test and Report card: Difference between pages

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imported>Charles Cresswell
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imported>Doug Williamson
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Back testing is a form of scenario analysis in which historical data are input into a financial forecasting model. The idea is to identify - according to the model being used for the back testing - what the future outcomes would be if the selected historical scenarios were to recur in the future.
A quantitative ranking of a financial institution’s level of service and customer responsiveness.  
 
The use of report cards is widely applied to measure financial institutions’ service levels.


Another use of back testing is to test the validity and accuracy of the forecasting model itself, in cases where actual historical data is available in relation to the output of the model. In this form of back testing historical data are input into the forecasting model, and the outputs from the model being back tested are compared with the related actual data for the variable being forecast by the model.  Any differences identified may be the result of errors or limitations in the forecasting model.


== See also ==
== See also ==
* [[Scenario analysis]]
* [[Key performance indicator ]]
* [[Stress test]]
* [[Service level agreement]]
 
[[Category:Compliance_and_audit]]

Revision as of 09:46, 9 October 2013

A quantitative ranking of a financial institution’s level of service and customer responsiveness.

The use of report cards is widely applied to measure financial institutions’ service levels.


See also