# Coarse Classification

From Open Risk Manual

## Definition

**Coarse Classification** (also *Grouped Variable*) in the context of Quantitative Risk Management is the transformation of the range of a Random Variable that is continuous or ranging over a large number of values to a more parsimonious range. It may be generated via the the discretization of Numerical Variable into a defined set of bins (intervals) or the grouping of different attributes of a Categorical Variable.

Coarse classification is an initial stage of model development, after Characteristic Selection