Question is Custom Battle "when is a stochastic DCAT model appropriate (2)"

adilviraniadilvirani
in CIA.DCAT

One of the answers to the above question is to use stochastic models when risks distributions can be easily inferred(Ex Cats)". Is is used for risks distributions that can be easily inferred or not easily inferred? I wanted to make sure if this is a typo or not? Thanks @javid

Cheers
Adil

Comments

  • javidjavid
    edited April 2019

    As per https://www.cia-ica.ca/docs/default-source/2013/213077e.pdf (page 14)

    Stochastic: certain risks are ideally modelled stochastically, such as those related to capital markets and those where the statistical loss distribution may be inferred and percentiles for results readily determined.

    So it's the case where they can be inferred.

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