Good-Bad Analysis
From Open Risk Manual
Revision as of 10:33, 9 September 2020 by Wiki admin (talk | contribs)
Definition
Good-Bad Ratio is the ratio of good (performing) loans or clients versus bad or non-performing loans/clients over time.
The ratio provides a quick snapshot of the credit portfolio's stability.
Issues and Challenges
- The ratio is derived from the accepted population. The population of clients that were not granted credit leads to the problem of Reject Inference
