If there is considerable uncertainty surrounding the likely value of an input variable for a financial model,one should use a

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A stochastic model incorporates the randomness and uncertainty of input variables, allowing for the exploration of different possible outcomes. This is the best choice when there is considerable uncertainty surrounding the likely value of an input variable for a financial model. Deterministic models assume fixed values for inputs, which may not accurately reflect reality, while hyperbolic and double-entry models are not directly related to addressing uncertainty.

If There Is Considerable Uncertainty Surrounding the Likely Value of an Input