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5 Cards in this Set
- Front
- Back
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Credit score models
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use observed loan applicant's characteristics either to calculate a score representing the app's prob of default or sort borrower into diff defult classes
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Marginal default probability
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prob that borrower will default in any given year
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cumulative default prob
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prob that a borrower will default over a specific multiyear per.
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no arbitrage
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inablity to make a profit without taking risk
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marginal mortality rate
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prob of a bond or loan defulting in any given year after the issue
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