Best Practices in FM Flashcards
The Importance of Efficiency and Flexibility
- Quik Decision Making
- Adaptation to New Data
- Resource Optimization
Key Principles for Efficient Modeling
Simplicity over Complexity
Use of Appropriate Software
Optimize Calculations
Key Principles for Flexible Modelling
Modular Design
Parameterization
Scenatio Analysis Capabilities
Best Practices in Model Design
- Consistent Naming Conventions
- Clear Documentation
- Regular Backups and Version Control
- Validation Layers
Handling Data for Efficiency and Flexibility
Data Cleaning and Preprocessing
Dynamic Data kinking
Use of Data structures
Iterative Development and Feedback
Start Small
Stakeholder Feedback
Continuous Testing
Embracing Modern Technologies
Parallel Processing
Cloud Computing
Machine Learning and AI
Continuous Learning and Upgradation
Stay Updated
Training and Workshops
Collaboration
The Significance of Documentation and Organisation
- Transparency
- Ease of Collaboration
- Audit and Compliance
- Long Term Viability
Documentation Best Practices
- Executive Summary
- Variable Definitions
- Assumptions and Sources
- Change Log
- Instructions
Organizing Models Effectively
Logical Structure
Naming Conventions
Use of Comments
Consistent Formatting
Tools for Documentation and Organisation
Integrated Development Environment
Version Control Systems
Dedicated Documentation Software
Why Model Auditing and Error Checking
- Ensuring Accuracy
- Risk Mitigation
- Regulatory Compliance
- Boosting Stakeholder Confidence
The Auditing Process: A Step-by-Step Guide
- Scope Definition
- Input Verification
- Logic and Formula Review
- Output Verification
- Documentation Review
Common Errors in Financial Models
Spreadsheet Errors
Data entry mistakes
Logical Fallacies
Overcomplexity
