I do not fully understand the following advantage of a stochastic model from the core reading: Similarly, a stochastic model makes it easier to explore ‘ripple effects’, that is, the knock-on consequences of the crystallisation of a risk event Is it saying that we can map the exact outcome of a risk event to a certain percentile of the distribution and therefore understand how this event affects each element of the capital model, as opposed to a deterministic set of scenarios, or is it about something else?
