Back Testing

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Back testing is way of testing if the predictions of a model are in accordance with realised data. Back testing is performed by checking whether the losses (actual historical) are distinct from the predicted losses by the model. For instance, in case of risk estimation, if the actual losses are higher, then the model is underestimating risk and vice versa. 

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Market Risk

What is a Market Risk? Market risk reflects the potential of reduction in the investment value due to the interplay of varying market forces in the direction t......
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