To tree or not to tree?
Imagine you have 2 banks: Bank A, and Bank B. These banks are restricted to using a certain acceptance rate.
- Bank A has to use an acceptance rate of 45%
- Bank B has to use an acceptance rate of 85%
Based on the strategy tables, which model will Bank A and Bank B prefer to use?
Do not hesitate to have a look at the tables again. They are loaded in your workspace as strategy_cloglog$table
and strategy_loss_matrix$table
.
This exercise is part of the course
Credit Risk Modeling in R
Hands-on interactive exercise
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