Credit granting: a comparative analysis of classification procedures

Article Abstract:

Financial classification issues, and particularly the financial distress problem, continue to be subject to vigorous investigation. The corporate credit granting process has not received as much attention in the literature. This paper examines the relative effectiveness of parametric, nonparametric and judgmental classification procedures on a sample of corporate credit data. The judgmental model is based on the Analytic Hierarchy Process. Evidence indicates that (nonparametric) recursive partitioning methods provide greater information than simultaneous partitioning procedures. The judgmental model is found to perform as well as statistical models. A complementary relationship is proposed between the statistical and the judgmental models as an effective paradigm for granting credit. (Reprinted by permission of the publisher.)

Credit management, Financial research

---

Loan commitment contracts, terms of lending, and credit allocation

Article Abstract:

Loan commitment contracts and lines of credit account for 70 percent of commercial and industrial lending agreements made in the U.S. An analysis of these contracts identifies their component parameters (interest rates, commitment fees, maturity dates, take-down limits, and collateral agreements), indicating that commercial lenders offer what may be termed loan 'packages', and that borrowers select from these packages only to later renegotiate certain of the lending parameters in exchange for other loan adjustments. In effect, the loan commitment contract borrower can purchase increased credit.

Economic aspects, Loans

---

A note on the local expectations hypothesis: a discrete-time exposition

Article Abstract:

For people unfamiliar with stochastic calculus, the local expectations hypothesis of capital markets may be difficult to understand. This discrete-time framework analysis of the local expectations hypothesis is offered as an explanation. In discrete time, this hypothesis holds that conditionally expected single period rates of return on bonds of various maturities are equal to the single period interest rate and to each other. Formulas and examples of the analysis are provided to support the local expectations hypothesis with regard to capital markets.

Case studies, Stochastic analysis, Interest rates, Efficient market theory

Similar abstracts:

• Abstracts: Where to find company freebies. Freedom of information at a price. Freebies: what's on offer and how to get it
• Abstracts: Does reject inference really improve the performance of application scoring models?. Immunization derived from polynomial duration vector in the Spanish bond market
• Abstracts: In search of income. Software, analytic tools and indicators
• Abstracts: Credit Datamatics. Your Legislative Date in Washington. Credit, Recession, and Sales Growth
• Abstracts: A consistent analysis of diversification decisions with non-observable firm effects. Diversification: the growing confusion

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.