Financial model: Difference between revisions
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A simplified representation of a financial situation, using | A simplified representation of a financial situation, using selected assumptions. | ||
Financial models are widely used in practice for valuation, and to support financial decisions and risk management. | Financial models are widely used in practice for valuation, and to support financial decisions and risk management. | ||
Revision as of 04:25, 31 December 2016
A simplified representation of a financial situation, using selected assumptions.
Financial models are widely used in practice for valuation, and to support financial decisions and risk management.
Models are also an important 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.
