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| ''Financial modelling and forecasting - spreadsheet risk.''
| | A percentage point is 1%, or 100 basis points. |
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| A simplifying assumption in economic analysis that other variables remain unchanged, with the exception of a very small number of variables under review.
| | An increase of 3%, say from 2% to 5%, is an increase of three percentage points, or 300 basis points. |
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| For example, looking simplistically at the relationship between demand and price, we might assume for analysis purposes that all other variables are held constant.
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| Making the ''ceteris paribus'' assumption in error is one of the most common sources of errors in forecasting and financial models.
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| == See also == | | == See also == |
| * [[Demand]] | | * [[Basis point]] |
| * [[FAST Modelling Standard]]
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| * [[Financial model]]
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| * [[Shadow model]]
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| * [[Spreadsheet risk]]
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| [[Category:The_business_context]]
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| [[Category:Corporate_finance]]
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| [[Category:Investment]]
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| [[Category:Identify_and_assess_risks]]
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| [[Category:Manage_risks]]
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| [[Category:Risk_frameworks]]
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| [[Category:Risk_reporting]]
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| [[Category:Financial_products_and_markets]]
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Revision as of 16:17, 9 August 2016
A percentage point is 1%, or 100 basis points.
An increase of 3%, say from 2% to 5%, is an increase of three percentage points, or 300 basis points.
See also
