Need to Be Sure What We're Modeling
I just want to make sure that I understand what we're modeling here. So, our dependent variable is the recovery rate. This is what we're predicting. Once we obtain our prediction, we would then subtract that from 1 to arrive at our LGD. Is this correct?
- Example: LGD = 1 - recovery rate
- In our Case: LGD = 1 - predicted recovery rate
1 answers ( 0 marked as helpful)
Me answering my own Q again. Smh.
Yeah, this is what we're doing.
