ERM Glossary: Model construction risk
[this page | pdf | references | back links]
This is a type of model risk and is
the risk that although our underlying model framework is sound we somehow
introduce errors in how it is actually constructed. Quantitative models usually
involve the application of mathematical algorithms, which are often implemented
using spreadsheets or other types of computer software. Model construction risk
may therefore be mitigated in part by adopting appropriate Information
Technology (IT) disciplines.
NAVIGATION LINKS
Contents | Prev | Next