calibration

Learning objectives: Explain the process of model validation and describe best practices for the roles of internal organizational units in the validation process. Compare qualitative and quantitative processes to validate internal ratings and describe elements of each process. Describe...

Learning outcomes: Evaluate the limitations of financial modeling with respect to the model itself, calibration of the model, and the model’s output. Assess the Pearson correlation approach, Spearman’s rank correlation, and Kendall’s τ, and evaluate their limitations and usefulness in finance...