what does it mean to pressure test a model? like I understand theoretically I guess - you want to test what happens to certain outputs when you make certain assumptions. But practically speaking, what do analysts do when they’re asked to pressure test a model provided by a client? just trying to learn, thanks!
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Test all probable and possible values of the assumptions and see if that crashes the formula. Decrease the assumption, increase it, flip its sign, or make it zero, and see whether the formulas still calculate properly. Basically just make sure the built in formulas still function given wild assumptions and that they don't blow up or #REF out your model.
Ah I see, thanks. How do you know which assumptions to change? and how many at a time?
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