# Hazard Rate Model

From Open Risk Manual

## Definition

A **Hazard Rate Model** is a parametric model of a Hazard Rate.

In the context of Credit Risk modelling is a modelled rate of default computed at any time, assuming that the obligor has survived up to that point.

## Choices for hazard rate functions

**Flat**: This is the simplest hazard rate model. It assumes a constant hazard rate**Piecewise linear**: The default process is assumed to have linear slope between observation points**Piecewise constant**: The default process is assumed to have a constant rate between observation points**Parametric Forms**: The hazard rate is modelled using an explicit function (exponential, gamma, etc)