This process usually extends the effective
default point to 420 days after the borrower made an on-time payment.
He said, 'Pakistan is reaching at a
default point very soon-it would not be able to repay its external debt-which has crossed $73 b.
The authors find that the rational
default point is below the underwater mark, at which the house price equals the remaining loan balance.
For that reason, Vasicek- Kealhofer KMV model measures the distance to the default using the number of standard deviations from the assets' value to reach the
default point .
The level at which an enterprise is assumed to default on its debt obligations is called the
default point. On the basis of studies of default statistics, KMV chooses to calculate this level as the value of the enterprise's short-term debt plus a portion of its long-term debt.
(3) We also find that the signal-to-noise ratio of subordinated debt spreads should be quite low far away from the default point of the bank.
The current distance d from the default point (where In [V.sup.T.sub.A] = ln D) can be expressed as:
represents the number of standard deviations that the firm is from the default point. DD depends on [V.sub.A] and [[sigma].sub.A].
For example, arrows that by
default point to the right may be redesigned for left-handed computer users.