Test case 4
uses the technique I mentioned back in a previous post on July 17th.
I built a match code that combined the first 3 digits of the potential
borrower’s zip code and the grade and sub-grade of the loan. I built a table of
the possible combinations and used all the previous note history to save the computed
returns on these notes. I then compared the newly released notes to this table.
I ignored notes that had less than 100 previous notes in this match code, and
only selected those that had returned at least 110% of the initial investment.
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