Show regression analysis to estimate the default probability, Financial Management

Assignment Help:

1. The standard approach here is to calculate some conventional ratios.

These ratios can afterwards be used along with regression analysis to estimate the default probability.

2. To acquire the migration matrix for a particular credit rating once could look at the past ratings data on all corporate and calculate the statistical estimates for the transition probabilities from one rating to another in a given time period.

3. There are several credit ratings and each credit comes with a migration matrix. Using past data one can as well calculate the joint probabilities that two or more credits migrate to a different rating.


Related Discussions:- Show regression analysis to estimate the default probability

Cash dividend, what is amount of cash dividend if investor buys share of 1...

what is amount of cash dividend if investor buys share of 100 at premium of 400.

Pay back method, Ask I have included a simple capital investment problem wh...

Ask I have included a simple capital investment problem which is in Course Documents. We are going to use the same numbers for several classes and look at some of the ways that cap

Show inter-corporate deposits, Q. Show Inter-Corporate Deposits? Inter-...

Q. Show Inter-Corporate Deposits? Inter-Corporate Deposits: Inter-corporate lending/borrowing or deposits (ICDs) is a popular short-term investment alternative for companies in

Players in primary market, PLAYERS IN THE PRIMARY MARKET Some important...

PLAYERS IN THE PRIMARY MARKET Some important players in the primary market are: Merchant Bankers When a company approaches the public for funds, merchant bankers manage

Risk analysis, Your broker calls to offer you the investment opportunity of...

Your broker calls to offer you the investment opportunity of a lifetime, the chance to invest in mortgage-backed securities. The broker explains that these securities are entitled

What are the remedies for overtrading, What are the Remedies for overtradin...

What are the Remedies for overtrading Short-term solutions Speeding up collection from customers. Slowing down payment to suppliers. Maintaining lower inventory

Estimate the total rate of return, Question: Explain: (a) the advant...

Question: Explain: (a) the advantages and disadvantages, to a company, of debt finance over equity finance; (b) the reasons why a company may choose to issue preference s

Explain demerits of accept-reject criteria, Q. Explain demerits of accept-r...

Q. Explain demerits of accept-reject criteria? Demerits of ARR:- (i) It utilizes accounting income rather than cash flows: - The principal short coming of ARR schema is th

Insider trading, Insider Trading Insider trading refers to dealing in s...

Insider Trading Insider trading refers to dealing in securities by persons who are privy to specific information of companies. This possession of confidential information gives

Explain the term- trade receivable days, Explain the term- Trade receivable...

Explain the term- Trade receivable days (turnover) [Yearend trade receivables/Credit sales (or turnover)] x   365days It is the average length of time taken by customers t

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd