Assume is when you take something to be true, without any proof of its truth. Assumptions play a key part in an analyst day-to-day. Generally, assumptions are followed by evidence, that either validate or nullify the assumption. For example, an Analyst may assume that the price of a stock will increase tomorrow. If the price does go up then, his assumption has been validated and was correct, if the price of the stock stays the same or decreases then his assumption was incorrect and wrong.
CFI is a global provider of financial modeling courses and of the FMVA Certification. CFI’s mission is to help all professionals improve their technical skills. If you are a student or are looking for a career change, the CFI website has a multitude of free resources to help you jumpstart your Career in Finance. If you seek to improve your technical skills check out some of our most popular courses. Below are some additional resources for you to further explore: