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<p>Not any more dangerous than employing uninformed “finance graduates” to do the same thing. No model is perfect. There are limitations to every model. Even Einstein’s original model for temperature-dependent heat capacity failed catastrophically at very low temperatures. The problem is again, in the misinformed using those techniques without realising what they were really doing; most finance students appear to see the math as a necessary evil.</p>
<p>Models aren’t supposed to replace human judgment. They’re just tools. Some finance students get lazy, of course. When a scientist uses a model, and looks at its results, she regularly questions, “what is this model really saying? how did it come up with this result?” and “does it make theoretical sense”? But the impression I get from most finance students is that their theoretical sense is weak, compared to scientists and engineers. Sure they’re pretty good at the techniques explicitly taught to them in school, but they’d rather not think harder than they have to.</p>