Report on the applicants credit history

Reference no: EM13981410

Before making an unsecured loan to an individual a bank orders a report on the applicants credit history. To justify making the loan, the bank must find the applicant's credit record to be satisfactory. Describe the bank's decision. What are the bank's objectives? What risk does the bank face? What role does the credit report play? Draw an influence diagram of this situation. (Hint: Your influence diagram should include chance nodes for a credit report and for eventual default.) Finally, be sure to specify everything (decisions, chance events, objectives) in your model clearly enough to pass the clarity test.

Reference no: EM13981410

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