Introduction to Financial Modelling

Principles of Excel as a Modelling Tool

Chapter 2: Excel Foundations

8 Topics | 1 Quiz
Chapter 3: Sensitivity Analysis

10 Topics | 1 Quiz
Essential Operations and Short-Cuts

Chapter 4: Operations and Short-cuts (I)

8 Topics | 3 Quizzes
Chapter 5: Operations and Short-cuts (II)

14 Topics | 1 Quiz
Introduction to Excel Functions

Chapter 7: Creating Conditionality, Comparison and Aggregation

9 Topics | 1 Quiz
Chapter 10: INDEX and XLOOKUPs

5 Topics | 1 Quiz
Building Models: Common Structures and Best Practice Principles

Planning Models for Decision Support

Chapter 15: From Planning to Practice

12 Topics

Now, if we were unaware of today’s whether (e.g. due to travel away from home), but were told that today the children had played in the garden, what would this tell us about the whether at home?

The tree shown above can be “reversed” as shown:

In other words, to generalise this: Given sufficient historic data about joint occurrences of events, one can determine the frequency of one from the frequency of the other, or vice-versa. But to establish such a data set of course requires that the occurrence can be observed in an objective way.

Unfortunately, in the case of “good decisions” and “good outcomes”, it is can be difficult to observe or measure each and even harder to associate their joint occurrence. For example, there is often a long time frame in business contexts between an investment decision and the knowledge of whether it is profitable or not in practice; for some investments it could take 30 years or more to know, for example. The business, economic or political context could also change in ways that could not have been foreseen, and unusual risks may occur that also could not have been anticipated, even with robust risk assessment processes.

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