# What happens when you mix a model and financial modelling?

0 Posted March 24, 2019 07:30:18We are used to looking at graphs to find out what happens when we do something.

We are used also to seeing the same thing with financial models.

The question is: are they the same?

In this article, I want to explain the process of how models are created, and then look at how to apply these models to real life situations.

What’s in a model?

A model is a representation of a situation.

This can be any kind of data, like a chart, a chart-like diagram, a simple graph or a table of contents.

The basic idea is to create an algorithm that can predict how a particular situation will develop based on the available information.

We can call this algorithm a model, or we can say that we can model what is happening.

The most common model for predicting the future involves a number of variables, called variables.

For example, a bank has two branches in New York and one branch in London.

A large number of financial instruments are in the US and one in the UK.

We have a number here called “variables”.

Each of these can be expressed as a number, like the stock price, the price of a house, or the price change of the stock market.

A simple model, with a few variables, looks like this: 1 – The stock price = (price x 100) x 100 = \$0.02 (in the US) (10 x 100 x 100/1000) = \$10  (in the UK) 2 – The price change = (change x 100 – price) x (price – change) = (10 x 10 x 100 / 1000) = (\$10 – \$10) 3 – The average rate of change =  (change x 10 – change x 100)/(change / 100) = 10 x (100 – 10) x 1000 = \$1.15 (100 – 100 / 100 / 10) =(\$10 – 10.50) 4 – The risk of change (expected rate of increase) = x (100-10) x 10/1000 = \$6.33 (x 10 / 10 / 100)/1000 =(\$2.25) 5 – The likelihood of change is a function of the expected rate of the change = 1 – the probability of the average rate increase = x (x 10 – x 10 / 1000)/1000=(1.5 x 10) x1000 =(2.75 x 10)/1000 6 – The probabilities of change are the same for all variables = (100-100)/(100 x 10-100) x10/1000=(\$1.25 x 10 + x 10).5 =(x10/10) =(1 + x10) – (\$10 x10)/1000 