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Which of the following statements are reasons for mathematical valuation and risk assessment models to be misleading or inaccurate?
I . There could be missing factors in models.
II . The data used as input for the model could be bad or wrong.
III . Model results could be misinterpreted.
IV . There could be errors in the derivation of the model.
Suggested Answer: A
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12 comments · newest first
RO
Rolland
3 months ago
I feel like misinterpretation is a big problem too. D makes sense for that reason.
RH
Rhea
3 months ago
I agree, but I lean towards C. Missing factors and bad data are huge issues.
MA
Marica
3 months ago
I think all options are valid. A is the best choice.
MA
Marti
3 months ago
I think all four reasons are valid!
CH
Chandra
3 months ago
Errors in derivation can really mess things up.
MA
Matthew
4 months ago
Wait, are we sure about model misinterpretation being a big deal?
MA
Margurite
5 months ago
I agree, bad data is a huge issue too!
KA
Kallie
5 months ago
Missing factors can totally skew results.
IN
In
6 months ago
I vaguely recall that errors in model derivation can also lead to inaccuracies, which makes me think IV should be considered too.
CO
Corinne
6 months ago
I think misinterpretation of results is a common problem we talked about, so III definitely seems relevant.
TW
Twana
6 months ago
I'm not entirely sure, but I feel like bad data is a huge issue too, so maybe II should be included as well.
LA
Latosha
6 months ago
I remember discussing how missing factors can really skew the results, so I think I would lean towards including I.