discuss any contemporary approaches to modelling credit risk at corporate portfolio level

Question

Question

Answer 1

Answer #1

Credit Risk is the risk of loss if one party fails to pay an amount owned as obligation.

The approaches would be to modelling credit risk -

1) Having a Proper credit Policy in terms of Value,time period,monitoring it with frequent followup

2) if we are investing on Bonds- Try to analyse repayment track record,credit rating

3) In case Bank- Interest rate should be charged to customer based on credit risk based on Previous repayments

Answer 2

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