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Creating and validating risk models [33]

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Bullet points include: Code audits and validations often require elaborate testing procedures Black-box testing usually requires detailed knowledge of model structure Conduct runs and compare to parallel predicted outputs and/or unit testing (include tests in the code that are rerun whenever the code is rebuilt) Bear in mind merits / challenges of outsourcing and/or buying off the shelf And need for documentation Model may do what its designer wanted but is this what the end user thinks it is doing? See also Kemp (2011) and Kemp and Patel (2011)

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