What is the conditional default rate?
What will be an ideal response?
The conditional default rate (CDR) is the annualized value of the unpaid principal balance of newly defaulted loans over the course of a month as a percentage of the unpaid balance of the pool (before scheduled principal payment) at the beginning of the month. The calculation begins with computing the default rate for the month as shown below:
Then, this is annualized as follows to get the CDR:
CDRt = 1 – (1 – default rate for month t)12
You might also like to view...
A firm that is willing to maintain its market share, and not attack the leader and other competitors in an aggressive bid for further market share, is known as a market ________
A) challenger B) leader C) follower D) nicher E) entrant
The first step in developing a budget is for the accounting department to prepare the sales forecast
Indicate whether the statement is true or false