23 Prepayment Rate Calculation Process
Prepayment are associated with Assets and Liabilities that have fixed maturities and have experienced a change in scheduled contractual cash flows on a fixed maturity instrument results in a prepaid event and should be captured.
The Prepayment Rate Calculation Process helps you to create data for the subsequent step prepayment modelling by performing following tasks:
- Define the product for which prepayments behavior need to be learnt (Product Selection block).
- Specify the parameters to calculate various risk factors which can influence prepayments, such as, As of Dates reference term, threshold prepaid amount, Market rate calculation parameters.
- Execute or run the Prepayment Rate Calculation process and generate results through Prepayment Rate Calculation Process Summary Page.
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