Development of financial models under partial uncertainty

Economic Annals-ХХI: Volume 145, Issue 9-10(2), Pages: 49-51

Citation information:
Kuznetsov, N. (2014). Development of financial models under partial uncertainty. Economic Annals-XXI, 9-10(2), 49-51. https://ea21journal.world/index.php/ea-v145-12/

Nikolay Kuznetsov
PhD (Engineering Science),
Doctoral Study Program,
ISMA – University of Applied Sciences
1 Lomonosov Str., build. 6, Riga, LV-1019, Latvia
nkuznetsov@outlook.com

Development of financial models under partial uncertainty

Abstract. The author examines the problems related to initial data partial uncertainty for the purposes of financial modeling. It has been demonstrated that the currently used methods contain a number of contradictions with the actual economic processes, which may result in inappropriate final forecasts obtained. To ensure due account of initial data uncertainty, it has been proposed to use interval algebra mathematical tools to develop financial models. The author has used investment project assessment challenge to illustrate the main ideas of the approach proposed to be employed. It shows simple methods which are supported by the interval model to evaluate both financial forecast uncertainty and investment project risk.

Keywords: Financial Model; Interval; Risk; Uncertainty

JEL Classification: O21; C53

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Received 10.09.2014