What Is Modeling? When Do Decision Makers Engage in Modeling

question 83

Essay

What is modeling? When do decision makers engage in modeling?

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Definitions:

Arithmetic Return

The simple average of a series of returns generated over a period of time, providing a basic measure of investment performance.

Investment

The allocation of resources, typically money, with the expectation of generating an income or profit.

Standard Deviation

A measure of the dispersion or volatility of asset returns, indicating the degree to which the returns vary from the average.

Population

The entire aggregation of items from which samples can be drawn for statistical measurement or inference.