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ARB

Model Validation Quant

High Demand$110K – $280K+
Model Validation Quants are the quality assurance layer of quantitative finance. They independently review and stress-test models built by other quants to ensure they're mathematically sound, properly calibrated, and not overfit to historical data. This role became critical after the 2008 crisis, when regulators mandated independent model validation (SR 11-7 in the US). MV quants need to understand every model in the firm's arsenal — from simple VaR to exotic derivatives pricing — well enough to identify weaknesses. The V7 engine's S21 (PBO Calculator) and S31 (Walk-Forward Validation) are exactly the tools MV quants use.
8
Core Skills
6
Key Tools
10
Lessons
5
Career Stages

A Day in the Life

“The front office submitted a new credit risk model for validation. You start by reviewing the methodology document — 45 pages of stochastic processes and calibration procedures. Something looks off in the correlation assumptions. You build an independent implementation in Python and compare outputs: your model produces 15% higher capital requirements. After investigating, you find they're using a simplified copula that underestimates tail dependence. You write a detailed validation report with recommendations.”

Core Skills

1
Model Risk Assessment
2
Backtesting Validation
3
Sensitivity Analysis
4
Benchmark Comparison
5
Documentation Review
6
PBO Analysis
7
Walk-Forward Testing
8
Regulatory Compliance (SR 11-7)

Tools & Technologies

PythonRExcelSQLInternal model librariesValidation frameworks

Prerequisites

✓Broad Quant Knowledge
✓Statistical Testing
✓Model Risk Understanding
✓Regulatory Awareness

Career Progression

MV Analyst
→
Model Validation Quant
→
Senior MV Quant
→
Head of Model Validation
→
Chief Model Risk Officer

Curriculum

1
MRF Model Risk Framework
Expert • 50 min • Lesson 1 of 10
→
2
BTV Backtesting Validation Checklist
Advanced • 45 min • Lesson 2 of 10
→
3
OFD Overfitting Detection Methods
Expert • 50 min • Lesson 3 of 10
→
4
WFT Walk-Forward Testing in Practice
Advanced • 50 min • Lesson 4 of 10
→
5
SEN Sensitivity Analysis
Expert • 45 min • Lesson 5 of 10
→
6
BEN Benchmark Comparison
Advanced • 40 min • Lesson 6 of 10
→
7
DOC Documentation Standards
Intermediate • 40 min • Lesson 7 of 10
→
8
RGR Regulatory Requirements for Algo Trading
Intermediate • 40 min • Lesson 8 of 10
→
9
STM Stress Testing ML Models
Expert • 45 min • Lesson 9 of 10
→
10
RPT Validation Reporting
Intermediate • 35 min • Lesson 10 of 10
→

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