What is a model error and how big a problem

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Reference no: EM131516079

Question:

Model building is used extensively in finance and for corporate purposes. Sometimes it can be wrong.

What is a model error and how big a problem could it be? Are there ways to mitigate the problem?

Whether it is sports statistics, your company process, or planning for your retirement, share your experiences with model building/risk.

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This assignment talks about model building. The basic steps used for model-building are the same across all modeling methods. The details vary somewhat from method to method, but an understanding of the common steps, combined with the typical underlying assumptions needed for the analysis, provides a framework in which the results from almost any method can be interpreted and understood. Considering the model selection and fitting before collecting the initial data is also a good idea. Without data in hand, a hypothesis about what the data will look like is needed in order to guess what the initial model should be. This assignment is prepared in MS word and it is about 200 words

Reference no: EM131516079

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