Loan Prepayment Formula

Definition

Loan Prepayment Formula. The formula which embodies the model for loan pool prepayment speed.

Issues and Challenges

From SMER sessions: This is a model. Includes other factors such as homogeniety. To model this more completely we need to identify the parameters that go in to this formula. Among these is the above homogeneity measure - need to know how that is measured and in what terms it is expressed, e.g. as a percentage, with reference to some mean or standard deviation and so on. Also some of the parameters used in this model would presumably make reference to standard mathematical model constructs such as normal distribution, variaous deviation measures, Chi squared and so on. These are not presently in the semantics model, but can be modeled semantically if required. This would not however be a mathematical model - we only need to identify these and show meaningful relationships (not mathematical relationships) between them.

Disclaimer

This entry annotates a FIBO Ontology Class. FIBO is a trademark and the FIBO Ontology is copyright of the EDM Council, released under the MIT Open Source License. There is no guarantee that the content of this page will remain aligned with, or correctly interprets, the concepts covered by the FIBO ontology.