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Financial Modeling With Jump Processes

What is Financial Modeling using Jump Processes?

Financial modeling using jump processes is incorporating the use of stochastic models to explain price movements for financial securities (i.e. the Black and Scholes option pricing model). The “jump” process refers to random price jumps, rather than continuous movements. This type of modeling involves heavy quantitative finance, which differs from the traditional type of cash flow modeling performed in corporate finance.

 

Financial Modeling with Jump Processes

Additional Questions and Answers

CFI is the official global provider of financial modeling and valuation analyst FMVA Designation. CFI’s mission is to help anyone become a world-class financial analyst and has a wide range of resources to help you along the way.

In order to become a great financial analyst, below are some additional questions and answers for you to explore further:

  • What is are the types of financial models?
  • What is sensitivity analysis?
  • What is bookkeeping?
  • What are the most common valuation methods?

Example Excel Model

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To learn How to Build an Excel Model step-by-step, click on the image below.

financial modeling questions and answers

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