Credit departments, generally referred to as risk management departments, use a variety of processes to manage their portfolios. The generic components are as follows:
* Underwriting
* Servicing
* Notification
* Acquisition
* Retention
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CDOs assemble an entire portfolio of credit risk exposures, segment that exposure into tranches with unique risk/return/maturity profiles, which are then transfered or sold to investors. A CDO's reference (underlying) portfolio can be assembled with physical cash flow assets such as bonds, loans, MBS, ABS etc., or with synthetic credit risk exposures: synthetic CDOs are backed by a portfolio of credit default swaps (CDS). alternatively: CDSs are swap contracst and agreements in which the protection buyer of the CDS makes a series of payments (often referred to as the CDS "fee" or "spread") to the protection seller and, in exchange, receives a payoff if a credit instrument (typically a bond or loan) experiences a credit event. It is a form of reverse trading.
Requires each executive department and agency to evaluate the credit worthiness of an individual
How can the return and standard deviation of a portfolio be deteremined
. Harry Markowitz established the foundation of modern portfolio theory in 1952.
Scoring rubrics have a relation to portfolio assessment because they are both evaluating the outputs of every learner.................................