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thank you for this. but why would it make sense to use this method to my problem since when they take a loan out they immediately use the money. i wonder if this affects the calcalation in anyway. since if they use loan immediately surely the probability of default is higher in short term rather...

thanks... another approach would be to do loan amount * (loan duration/365) * probabilty of default in 1 year . e.g. 100k*(180/365)*0.01, but does this make sense? because then we are assuming a linear relationship on how probabilility changes over year. so e.g. we are saying that half way...

many thanks in what situations is using the hazard appraoch suitable?

hi guys, i am struggling with this. say i am given an annual probabilty of default for a company going insolvent as 0.02. so 2%. say this client then takes out a 100k , 150 day loan on jan 1st 2018, what is predicted default amount? am i right in thinking you can model this as bernoulli ? i...