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Modeling Best Practices There is a natural tension in financial modeling between building complex models and building simple models. An analyst must know the advantages
Modeling Best Practices
There is a natural tension in financial modeling between building complex models and building simple models. An analyst must know the advantages and disadvantages of either method.
Complex financial models are all of the following EXCEPT:
1. Most outputs are modeled using first principles.
2. Size and complexity make the models more prone to error.
3. They are easy to audit.
4. Typically contains a high degree of precision.
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