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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.

  1. Bank A has to use an acceptance rate of 45%
  2. 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.

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Credit Risk Modeling in R

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