Barbell Distribution
From Open Risk Manual
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Definition
Barbell distribution is an informal name given to any Distribution that exhibits a range that seems to be a composite of two extreme (separated) domains. A more formal name is Bimodal distribution
Issues and Challenges
- In the context of the distribution of Credit Portfolio characteristics a barbell distribution may involve risk patterns that are not visible in aggregates / averages
- Modelling multimodal distributions is generally more complex (involves large number of parameters)
