Open Access. Powered by Scholars. Published by Universities.®
- Institution
- Publication Type
Articles 1 - 2 of 2
Full-Text Articles in Economic Theory
Analysis Of Credit Risk And Single / Two Factor Model, Siwen Chen
Analysis Of Credit Risk And Single / Two Factor Model, Siwen Chen
Undergraduate Student Research Internships Conference
Since 2008, businesses and banks must manage and track more risk than ever before. Financial risk management helps companies and banks decrease the risk of investment and trade. Additionally, financial risk management gives a guide on how to forecast and manage the risk efficiently. More specifically, the three major risks are market risk, credit risk, and operational risk. This report will focus on the credit risk: introducing the definition of credit risk, single factor model, the relationship between coefficient and default probability, and the relationship of m coefficient and default probability. Using the single factor model, we will extend the …
Consequences Of Information Asymmetry On Corporate Risk Management, Howard J. Merrill Iii
Consequences Of Information Asymmetry On Corporate Risk Management, Howard J. Merrill Iii
Applied Economics Theses
This paper will demonstrate the impact information asymmetry has on risk management. There is a noticeable impact within the context of consumer credit risk. If a firm is able to recognize this, they can make improved credit decisions that will reduce the consequences. The theoretical impact will be presented while depicting areas of risk management that are susceptible to information asymmetry. We find a direct impact on the development of scoring models, credit policies, and origination volume. These results hold for banks with portfolios consisting of consumer credit products and small business loans. Once known, banks can better tailor their …