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  #11  
Old 05-06-2011, 01:41 AM
buy-side buy-side is offline
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This non-economic improvements portion of the question is the worst part of the Can-Do exercise
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  #12  
Old 06-17-2011, 09:37 AM
jpw209 jpw209 is offline
 
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Another possible change is in G12 within cashflows, use a standard deviation of 0.2 instead of 0.1. Are far as non-economic changes I am lost as well.
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  #13  
Old 06-17-2011, 04:28 PM
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Originally Posted by jpw209 View Post
Another possible change is in G12 within cashflows, use a standard deviation of 0.2 instead of 0.1. Are far as non-economic changes I am lost as well.
Just think: what else could my model show me to help me:

a) define the problem
b) design a solution
c) monitor the results

This is just the cycle they go nuts over in the modules. I would honestly tell you my non-economic answers, but I think that may violate the rules, so just use those 3 bullets above to help your creative process
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Old 06-18-2011, 05:55 PM
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Does stochastic model help solving the problem of interdependent assumptions? For example, modeling exchange rate as stochastic variable will improve model performance because it incorporates future uncertainties. However, exchange rate also has interdependency relationship with inflation and investment yield. Does stochastic model help? Or is that a different issue?


Thanks,
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  #15  
Old 06-18-2011, 08:03 PM
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Does stochastic model help solving the problem of interdependent assumptions? For example, modeling exchange rate as stochastic variable will improve model performance because it incorporates future uncertainties. However, exchange rate also has interdependency relationship with inflation and investment yield. Does stochastic model help? Or is that a different issue?


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as long as you explain it clearly, you should get some points from the grader.
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  #16  
Old 05-18-2012, 12:29 AM
wangwwzj wangwwzj is offline
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Can anyone help with recommendations for model improvements? I'm having an issue specifically with regards to non-economic model deficiancies.

In terms of economic ones, I believe that the exchange rate, cost of borrowing, yield for investing, and inflation could be modeled better, but what about non-economic assumptions?

Any ideas would be appreciated. Thanks.
I think I have the same question.
i think energy cost, delivery costs, equipment and labor cost could be classified to non-economic variables, am I right?

someone metinoned that non-economic variable could be regulation, political and so on. but how can we quantize them, or just use a margin?
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  #17  
Old 05-18-2012, 03:06 AM
jandoval jandoval is offline
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That's what I'm thinking. costs can be considered non-economic especially depending on what context we're considering them in (e.g. regulation rather than inflation increasing costs). some of the advice I'm seeing in threads makes it seem like people are suggesting to add completely new non-economic variables to the model (I don't feel like the problem is pointing towards this).
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