What is 'Financial Modeling'
The process by which a firm constructs a financial representation of some, or all, aspects of the firm or given security. The model is usually characterized by performing calculations, and makes recommendations based on that information. The model may also summarize particular events for the end user and provide direction regarding possible actions or alternatives.
BREAKING DOWN 'Financial Modeling'
Financial models can be constructed in many ways, either by the use of computer software, or with a pen and paper. What's most important, however, is not the kind of user interface used, but the underlying logic that encompasses the model. A model, for example, can summarize investment management returns, such as the Sortino ratio, or it may help estimate market direction, such as the Fed model.

Sortino Ratio
A modification of the Sharpe ratio that differentiates harmful ... 
Decision Analysis  DA
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Local Volatility
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Stochastic Volatility  SV
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Lintner's Model
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Roll's Critique
An economic idea that suggests that it is impossible to create ...

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Professionals
The Best Financial Modeling Courses for Investment Bankers
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Common Interview Questions for Financial Analysts
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Markets
Digging Into The Dividend Discount Model
The DDM is one of the most foundational of financial theories, but it's only as good as its assumptions. 
Professionals
Get An Academic Finance Career
Working nine months a year and earning a sixdigit salary might seem like the high life, but these jobs are not easy to come by. 
Professionals
Style Matters In Financial Modeling
If you're looking to get a job as an analyst, you'll need to know how to work it. 
Investing
Why This Finance Pro Sees Deflating Bubbles
Here's why this finance expert believes not only that there are bubbles but that they are deflating. 
Investing News
Citigroup Cuts U.S. Growth Forecast
After the recently published IMF forecast report, major banks like Citigroup are also cutting growth projections for the U.S. Here's why. 
Economics
Understanding Game Theory
Game theory is a model for making decisions that weighs the benefits of a choice along with the interaction between participants.

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