Structural Vs Reduced Form Models of Credit Risk (CFA Level 2, FRM Part 2, Book 2, Credit Risk)

In this video from the FRM Part 2 curriculum, we explore the differences between two broad categories of credit risk models: Structural Models and Reduced Form Models. We take a look at how each of these type of models work and their respective pros and cons. For more videos on FRM Part 2 preparations, please visit the course page: www.finRGB.com....

[@finRGB]

FRM Learning Objective: Distinguish between the structural approaches and the reduced-form approaches to predicting default.

[@mahersaeed5407]

Great explanation! Thanks a lot…

[@michaelnguyen7081]

How about the empirical model of credit risk (Altman Z score), do you have any information about it? Thank you for your videos

[@finRGB]

Sure, will do a separate video on the Altman's model.