Reduced Form Model vs Structural Model

[ar169]

Do either one or both of these methods require specification of the company’s Balance Sheet?

 

[Iconoclasts]

The structural model requires specification of the structure of the company’s B.S.
The reduced form does not.

 

[ar169]

Thats not true according to EOC#5 R45.

 

[JSobes]

I guess because technicall the reduced form model is applying assumptions to the structural model, but I would suppose that if you have the output needed from the structural model you would not need the balance sheet inputs AGAIN…

 

[BaseballRedhawks]

What are these 2??? vageuly remember hearing these..

 

[ro424]

The text says reduced form models do not require specification, but the eoc says it does. Looks like an error.