Posted on:

18 May 2022


Assuming worst case for funded amount, why not 0?

If we want to assume the worst case scenario to proceed with credit risk modelling, wouldn't it be more appropriate to assume that the candidate did not pay anything of the funded amount (i.e. 0)? Wouldn't this be 1. a possible option and 2. a worse case than filling with minimum?
Is it a subjective matter in this case? or should we always be filling with the minimum of funded amount if we are dealing with CRM?

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