credit risk/ the value of the business

hanaabdalrahmanhanaabdalrahman MemberPosts:9Contributor I
edited December 2018 inHelp

hello.. can you send me some references for the calculation of earn and lose money, i search about it but i get for some performance measures like ACC and error and others thanks

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  • kypexinkypexin Moderator, RapidMiner Certified Analyst, MemberPosts:290Unicorn
    Solution Accepted

    I will duplicate my answer from personal message here, so may be it is useful for someone else.

    There's not that much universal recipes out there, as such a calculation is very business-specific.

    I can highly recommend you this book first:https://www.amazon.com/Data-Science-Business-Data-Analytic-Thinking/dp/1449361323which is the best source on the topic of cost-centered approach to ML.

    You can also have a look at couple of my presentations and a webinar where I have evaluated a real life example of cost calculation:

    1)http://whatthefraud.wtf/2018-tula-labs-open-day/

    2)http://whatthefraud.wtf/selling-data-science/

    At the end, the most important thing underlying ishow much a correct and incorrect prediction do cost for your business。根据一个industry and a business model, this calculation might be either simple and straightforward, or arbitrary complex.

    Specifically, for credit risk you have to answer this simple questions:

    1) How much do I lose if a customer granted X amount of money do not pay it back?

    2) Hom much do I lose if I reject a loan applikcation to a good customer?

    3) How much do I earn if I give a loan of amount of X to a good customer and he pays it back?

    --
    Vladimir
    http://whatthefraud.wtf
    sgenzer rfuentealba

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