Month End Glossary

Quantitative Model

A Quantitative Model is a mathematical representation used to simulate and analyze real-world systems.

A Quantitative Model applies mathematical techniques and statistical principles to represent the behavior of real-world systems quantitatively. These models are widely used in finance for asset pricing, risk management, and investment analysis. For example, a financial analyst may use a quantitative model to predict the impact of interest rates on bond prices. Quantitative models can range from simple formulas, like those relating a bond's price to its yield, to complex simulations involving large datasets and advanced computations.

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