Question

Question: Which assumptions are necessary to employ the formulas given for Model 1?

Short answer

Answer

Model 1 is valuable for a specific circumstance where a single line of clients arrives agreeing to Poisson dissemination.

Step-by-step solution

Necessary assumption to employ

Model assumptions denote the large collection of obviously stated (or implicit premised) conventions, choices, and other specifications on which any risk model is based. The rightness of those expectations is a major factor behind the model risk linked with a given model.

Necessary to use the formulas given for Model 1