---
title: (Un)Calculated Risk | by Peter Orr of Intuitive Analytics | Financial Models | Intuitive Analytics
description: Financial Models | by Peter Orr of Intuitive Analytics
---

# (Un)Calculated Risk | by Peter Orr of Intuitive Analytics

## [Hull-White add Weight to New Interest Rate Modeling Research](https://www.intuitive-analytics.com/blog/bid/74855/Hull-White-add-Weight-to-New-Interest-Rate-Modeling-Research)

 Posted by Peter Orr on Apr 04, 2014

[![](https://www.intuitive-analytics.com/hs-fs/file-642389577-png/images/hw_pic_small.png) ](https://www.intuitive-analytics.com/blog/bid/74855/Hull-White-add-Weight-to-New-Interest-Rate-Modeling-Research)

Last summer I wrote [an article](https://www.intuitive-analytics.com/blog/bid/60033/2013-Discovery-The-Missing-Link-in-Interest-Rate-Modeling) describing a missing link in rate modeling that had been discovered in exciting new research by Nick Deguillaume, [Ricardo Rebonato](http://en.wikipedia.org/wiki/Riccardo_Rebonato), and Andry Pogudin entitled [The nature of the dependence of the magnitude of rate moves on rates levels: a universal relationship](http://www.tandfonline.com/doi/abs/10.1080/14697688.2012.740569#.Uz6Rx_ldUb0). This mouthful offered two simple takeaways. First, accurately capturing *how *rates are expected to change, particularly over long time horizons, is central to every rate risk management decision we face. And second, that so-called “standard models” that don’t provide for the observed fact that rates tend to change differently depending on their level aren’t so realistic nor as a result, very good at informing interest rate decisions like refunding opportunities.

[Read More](https://www.intuitive-analytics.com/blog/bid/74855/Hull-White-add-Weight-to-New-Interest-Rate-Modeling-Research)

 Topics: [Financial Models](https://www.intuitive-analytics.com/blog/topic/financial-models), [interest rate model](https://www.intuitive-analytics.com/blog/topic/interest-rate-model), [yield curve modeling](https://www.intuitive-analytics.com/blog/topic/yield-curve-modeling), [call option](https://www.intuitive-analytics.com/blog/topic/call-option), [bond option](https://www.intuitive-analytics.com/blog/topic/bond-option)

## [Refundings Show Finance Profs How to Colossally Screw-Up Finance](https://www.intuitive-analytics.com/blog/bid/71485/Refundings-Show-Finance-Profs-How-to-Colossally-Screw-Up-Finance)

 Posted by Peter Orr on Oct 09, 2013

[![](https://www.intuitive-analytics.com/hs-fs/file-341979760-png/images/mistake_here_it_is-resized-600.png) ](https://www.intuitive-analytics.com/blog/bid/71485/Refundings-Show-Finance-Profs-How-to-Colossally-Screw-Up-Finance)

"To confuse the model with the world is to embrace a future disaster driven by the belief that humans obey mathematical rules."  - *[The Financial Modeler's Manifesto](http://www.wilmott.com/blogs/eman/index.cfm/2009/1/8/The-Financial-Modelers-Manifesto)*, Emanual Derman and Paul Wilmott

[Read More](https://www.intuitive-analytics.com/blog/bid/71485/Refundings-Show-Finance-Profs-How-to-Colossally-Screw-Up-Finance)

 Topics: [Financial Models](https://www.intuitive-analytics.com/blog/topic/financial-models), [refunding](https://www.intuitive-analytics.com/blog/topic/refunding), [advance refunding](https://www.intuitive-analytics.com/blog/topic/advance-refunding), [refunding efficiency](https://www.intuitive-analytics.com/blog/topic/refunding-efficiency), [hedging](https://www.intuitive-analytics.com/blog/topic/hedging)

## [2013 Discovery - The Missing Link in Interest Rate Modeling!](https://www.intuitive-analytics.com/blog/bid/60033/2013-Discovery-The-Missing-Link-in-Interest-Rate-Modeling)

 Posted by Peter Orr on Jun 20, 2013

[![](https://www.intuitive-analytics.com/hs-fs/file-201326977-png/images/movements_to_level_img.png) ](https://www.intuitive-analytics.com/blog/bid/60033/2013-Discovery-The-Missing-Link-in-Interest-Rate-Modeling)

"There is no logical way to the discovery of these elemental laws. There is only the way of intuition, which is helped by a feeling for the order lying behind the appearance."  - Albert Einstein

[Read More](https://www.intuitive-analytics.com/blog/bid/60033/2013-Discovery-The-Missing-Link-in-Interest-Rate-Modeling)

 Topics: [Financial Models](https://www.intuitive-analytics.com/blog/topic/financial-models), [interest rate model](https://www.intuitive-analytics.com/blog/topic/interest-rate-model), [financial model](https://www.intuitive-analytics.com/blog/topic/financial-model), [yield curve modeling](https://www.intuitive-analytics.com/blog/topic/yield-curve-modeling)

## [50 Years of UST Yields - How Well do Forwards Predict?](https://www.intuitive-analytics.com/blog/bid/59605/50-Years-of-UST-Yields-How-Well-do-Forwards-Predict)

 Posted by Peter Orr on May 17, 2013

[![](https://www.intuitive-analytics.com/hs-fs/file-34956540-png/images/ust_10y_yields-resized-600.png) ](https://www.intuitive-analytics.com/blog/bid/59605/50-Years-of-UST-Yields-How-Well-do-Forwards-Predict)

"Despite its role in...finance, the expectations hypothesis (EH) of the term structure of interest rates has received virtually no empirical support." - [Predictions of Short-Term Rates and the Expectations Hypothesis](https://www.intuitive-analytics.com/blog/topic/research.stlouisfed.org/wp/2010/2010-013.pdf‎), Federal Reserve Bank of St. Louis

[Read More](https://www.intuitive-analytics.com/blog/bid/59605/50-Years-of-UST-Yields-How-Well-do-Forwards-Predict)

 Topics: [Financial Models](https://www.intuitive-analytics.com/blog/topic/financial-models), [interest rate model](https://www.intuitive-analytics.com/blog/topic/interest-rate-model), [financial forecasting](https://www.intuitive-analytics.com/blog/topic/financial-forecasting), [Financial Decisions](https://www.intuitive-analytics.com/blog/topic/financial-decisions)

## [The ‘Formula that Killed Wall Street?’ or ‘Know A Bad Rate Model When You See It’](https://www.intuitive-analytics.com/blog/bid/54011/The-Formula-that-Killed-Wall-Street-or-Know-A-Bad-Rate-Model-When-You-See-It)

 Posted by Peter Orr on Jun 19, 2012

[![](https://www.intuitive-analytics.com/hs-fs/file-15750621-png/images/straight_line_rate_model.png) ](https://www.intuitive-analytics.com/blog/bid/54011/The-Formula-that-Killed-Wall-Street-or-Know-A-Bad-Rate-Model-When-You-See-It)

"Copulas are generally an early doodling activity in an area." - Anonymous Street quant

[Read More](https://www.intuitive-analytics.com/blog/bid/54011/The-Formula-that-Killed-Wall-Street-or-Know-A-Bad-Rate-Model-When-You-See-It)

 Topics: [Financial Models](https://www.intuitive-analytics.com/blog/topic/financial-models), [interest rate model](https://www.intuitive-analytics.com/blog/topic/interest-rate-model), [financial model](https://www.intuitive-analytics.com/blog/topic/financial-model), [financial economy](https://www.intuitive-analytics.com/blog/topic/financial-economy), [Financial Decisions](https://www.intuitive-analytics.com/blog/topic/financial-decisions), [public finance](https://www.intuitive-analytics.com/blog/topic/public-finance), [public finance software](https://www.intuitive-analytics.com/blog/topic/public-finance-software), [financial risk](https://www.intuitive-analytics.com/blog/topic/financial-risk), [public finance analytics](https://www.intuitive-analytics.com/blog/topic/public-finance-analytics)

## [Financial Software: The Good, the Bad, the Ineffective](https://www.intuitive-analytics.com/blog/bid/13571/Financial-Software-The-Good-the-Bad-the-Ineffective)

 Posted by Peter Orr on Dec 31, 2008

[![](https://www.intuitive-analytics.com/hs-fs/file-15753741-png/images/what_ia_does_circle.png) ](https://www.intuitive-analytics.com/blog/bid/13571/Financial-Software-The-Good-the-Bad-the-Ineffective)

 "The dividend of the computer revolution to us did not come in the flooding of self-perpetuating email messages and access to chat rooms; it was in the sudden availability of fast processors capable of generating a million sample paths per minute." 

[Read More](https://www.intuitive-analytics.com/blog/bid/13571/Financial-Software-The-Good-the-Bad-the-Ineffective)

 Topics: [Finance Professionals](https://www.intuitive-analytics.com/blog/topic/finance-professionals), [Financial Models](https://www.intuitive-analytics.com/blog/topic/financial-models), [Intuitive Analytics](https://www.intuitive-analytics.com/blog/topic/intuitive-analytics), [Financial Software](https://www.intuitive-analytics.com/blog/topic/financial-software), [Financial Engineers](https://www.intuitive-analytics.com/blog/topic/financial-engineers), [Wall Street](https://www.intuitive-analytics.com/blog/topic/wall-street), [Intellectual Property](https://www.intuitive-analytics.com/blog/topic/intellectual-property), [Financial Services](https://www.intuitive-analytics.com/blog/topic/financial-services)

## [Are Financial Models Worthless? Risk and Uncertainty…](https://www.intuitive-analytics.com/blog/bid/13566/Are-Financial-Models-Worthless-Risk-and-Uncertainty)

 Posted by Peter Orr on Dec 23, 2008

[![](https://www.intuitive-analytics.com/hs-fs/file-15742015-png/images/financial_graph.png) ](https://www.intuitive-analytics.com/blog/bid/13566/Are-Financial-Models-Worthless-Risk-and-Uncertainty)

 "Risk comes from not knowing what you're doing." 

[Read More](https://www.intuitive-analytics.com/blog/bid/13566/Are-Financial-Models-Worthless-Risk-and-Uncertainty)

 Topics: [Financial Models](https://www.intuitive-analytics.com/blog/topic/financial-models)

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