wondering do not so sure to master the distinction between parameters and variables of a capital model, so would like to consult that, if as the solutions, what are the variables of capital model? for previously i was understanding e.g. reserve estimate, volatility, are modelled variables, seemingly incorrect? and such kind of topic seems not covered any by the study materials. thanks!
Variables are things that vary. Variables could be inputs to a model, or outputs from a model. Parameters are the things you set within the model, for example the mean or the variance of a distribution. These things will have been discussed in the early statistical exams.
