Business and Personal Finance Dictionary
# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
- STOCHASTIC
A term used to describe outcomes based on uncertain relationships. The process of change in a variable resulting from change in a parameter. For example, option adjusted spread measures of yield and Monte Carlo models of interest rate risk are stochastic measures. A method of modeling changes that allows for a range of possible outcomes. Sometimes called probabilistic. The opposite of deterministic.Back