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Scenario Analysis: Incorporating Uncertainty Into Your Loan Analysis
The only thing that is certain is uncertainty.
When analyzing the performance of your loans, assumptions must be made about factors that could affect their future cash flows.
No matter how well-researched, these assumptions ultimately differ from the end result.

Using of scenario analysis, it is possible for your institution to assess the sensitivity to deviations in prepayment rates, charge-off rates and other factors in your projected performance.
Scenario Analysis: Incorporating Uncertainty Into Your Loan Analysis

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