A stochastic model can answer a lot of questions for you, but as with all modelling, the answer you receive is only as valuable as the model in question, writes Steph Willcox
The world of an actuary is a strange one. We place monetary values on things that may happen in the future and then help companies and clients prepare for these uncertain events based on our professional, but subjective, outlook. Financial planning professionals of course attempt to do the same thing for individual clients, to construct a portfolio that will grow sufficiently to fund their client's objectives. Traditional deterministic models for lifetime cash flow planning are, quite rightly, falling out of favour, with the financial planning world embracing uncertainty and choosing ...
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