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A CRITICAL APPRAISAL OF COMPANY BANKRUPTCY PREDICTION MODELS
Scholedge International Journal of Business Policy & Governance
View Archive Info| Field | Value | |
| Title |
A CRITICAL APPRAISAL OF COMPANY BANKRUPTCY PREDICTION MODELS
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| Creator |
Bishnoi, Rohit
Sahu, Reena |
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| Subject |
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Corporate Bankruptcy, Insolvency, Business Restructuring — |
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| Description |
Study discusses four models representing credit risk theories. KMV has powerfully criticized the utilization of transition possibilities by Credit Metrics that is predicated on the average historical frequencies of defaults and credit migration. As discovered by Crouhy et al. (2000), KMV objects on the 2 crucial assumptions of Credit Metrics: (1) all corporations at intervals identical rating category have identical default rate, and (2) actual default rate is adequate to the historical average default rate. KMV considers this can't be true since default rates area unit continuous, whereas ratings area unit adjusted in separate manner. KMV has verified, through a simulation exercise, that the historical average default rate and transition possibilities will deviate significantly from the particular rates.
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| Publisher |
Scholedge R&D Center
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| Contributor |
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| Date |
2015-06-25
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion — — |
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| Format |
application/pdf
text/html |
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| Identifier |
http://thescholedge.org/index.php/sijbpg/article/view/156
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| Source |
Scholedge International Journal of Business Policy & Governance ISSN 2394-3351; Vol 2, No 5 (2015); 21-27
2394-3351 |
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| Language |
eng
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| Relation |
http://thescholedge.org/index.php/sijbpg/article/view/156/128
http://thescholedge.org/index.php/sijbpg/article/view/156/136 http://thescholedge.org/index.php/sijbpg/article/view/156/183 |
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| Coverage |
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| Rights |
Copyright (c) 2015 Scholedge International Journal of Business Policy & Governance ISSN 2394-3351
http://creativecommons.org/licenses/by-nc/4.0 |
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