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  #1  
Old 04-02-2016, 09:38 PM
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Tetsuo Tetsuo is offline
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Default Improving BBA Task 3?

I tested pretty much everything. Some things I think I may have done wrong:

- Didn't focus on any specific metric tested. I just copied everything into my table. So should I specifically focus on the metrics I chose in task 2?
- Did not explain well enough the values I decided to test
- Tested forfeiture and redemption independently. Later I saw that many people tested these together.

Any tips?
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  #2  
Old 04-02-2016, 10:26 PM
Parkerballa9 Parkerballa9 is offline
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Originally Posted by Tetsuo View Post
I tested pretty much everything. Some things I think I may have done wrong:

- Didn't focus on any specific metric tested. I just copied everything into my table. So should I specifically focus on the metrics I chose in task 2?
- Did not explain well enough the values I decided to test
- Tested forfeiture and redemption independently. Later I saw that many people tested these together.

Any tips?
1. I believe the task states that the risk and performance metrics chosen in task 2 should be considered in the testing
2. I would certainly justify why I chose to shock the assumptions in the way I did (like why shock some more than others or why shock everything by 10% and why not 5%)
3. I don't think there's a right answer to testing redemption/forfeiture independently or not. I would just make sure to justify why I did what I did (if you test together make sure to highlight on their inter dependencies)

What I'm struggling with is whether current fuel price should be tested... Since we know the current fuel price why test it? But i've seen a lot of people mention that they tested it and passed so I don't know about that one...
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  #3  
Old 04-02-2016, 11:41 PM
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Originally Posted by Parkerballa9 View Post
1. I believe the task states that the risk and performance metrics chosen in task 2 should be considered in the testing
2. I would certainly justify why I chose to shock the assumptions in the way I did (like why shock some more than others or why shock everything by 10% and why not 5%)
3. I don't think there's a right answer to testing redemption/forfeiture independently or not. I would just make sure to justify why I did what I did (if you test together make sure to highlight on their inter dependencies)

What I'm struggling with is whether current fuel price should be tested... Since we know the current fuel price why test it? But i've seen a lot of people mention that they tested it and passed so I don't know about that one...
I tested fuel price because it is known to change a lot, but I did not pass. I don't think I failed because I tested fuel price, more because of how I presented my analysis. Ok, so you included just the CTE/VaR you chose, and also PVP/Revenue only? I reread the assignment, and you're right, I'm not sure how I missed that, and this is probably why I failed this question in particular. I included way too much info.
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Old 05-18-2016, 12:24 AM
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When they ask to use the same metricS recommended in task 2, I do not understand if the mean the combination of both performance metric (say, PVP/IR of 10%) and risk metric (say, CTE (90)), so they actually ask to make the tests with a specific price... Or if they want you to use different prices, like for example CTE (90) and CTE (75) if you mentioned both values in task 2, still with a PVP/IR of 10%? I am a bit confused.
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Old 05-18-2016, 09:39 AM
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When they ask to use the same metricS recommended in task 2, I do not understand if the mean the combination of both performance metric (say, PVP/IR of 10%) and risk metric (say, CTE (90)), so they actually ask to make the tests with a specific price... Or if they want you to use different prices, like for example CTE (90) and CTE (75) if you mentioned both values in task 2, still with a PVP/IR of 10%? I am a bit confused.
I used a specific price for my sensitivity test in the middle of my range
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Old 05-18-2016, 11:23 AM
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Originally Posted by abrahamlandrix View Post
When they ask to use the same metricS recommended in task 2, I do not understand if the mean the combination of both performance metric (say, PVP/IR of 10%) and risk metric (say, CTE (90)), so they actually ask to make the tests with a specific price... Or if they want you to use different prices, like for example CTE (90) and CTE (75) if you mentioned both values in task 2, still with a PVP/IR of 10%? I am a bit confused.
They're saying to use your chosen performance metric and risk metric and don't change them. In other words, test how your performance metric reacts at your chosen risk metric with your original suggested price when you do the sensitivity testing. Remember, all sensitivity testing is is changing a single variable at a time and seeing how it affects your results (your performance metric).

If you start changing how you measure your results then it's going to completely muddle the picture and you won't be able to tell which inputs impact the model the most.
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Old 05-18-2016, 12:15 PM
abrahamlandrix abrahamlandrix is offline
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They're saying to use your chosen performance metric and risk metric and don't change them. In other words, test how your performance metric reacts at your chosen risk metric with your original suggested price when you do the sensitivity testing. Remember, all sensitivity testing is is changing a single variable at a time and seeing how it affects your results (your performance metric).

If you start changing how you measure your results then it's going to completely muddle the picture and you won't be able to tell which inputs impact the model the most.
That's what I had in mind, thank you.
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Old 05-18-2016, 02:17 PM
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They're saying to use your chosen performance metric and risk metric and don't change them. In other words, test how your performance metric reacts at your chosen risk metric with your original suggested price when you do the sensitivity testing. Remember, all sensitivity testing is is changing a single variable at a time and seeing how it affects your results (your performance metric).

If you start changing how you measure your results then it's going to completely muddle the picture and you won't be able to tell which inputs impact the model the most.
did the same sneakerx except for the price part since I listed a range in Task 2
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