13.13 Recommended Configuration

For maximum precision, use the following settings in a Stochastic ALM Process Rule:

• Extended Vasicek term Structure Model
• The Cubic Spline Smoothing Technique
• Low Discrepancy Sequences
• 2,000 Rate Scenarios

Note:

This is the recommended configuration for precision. Because 2000 scenarios may require a significant amount of computing time, the user may prefer to lose some precision by selecting fewer scenarios.

The following section attempts to explain some criteria and issues related to choosing the optimal configuration for stochastic processing.