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The key simulation process for Markov chain delinquency analysis depends on a state transitions for each loan, each period, resulting in a cash flow sequence
The key simulation process for Markov chain delinquency analysis depends on a state transitions for each loan, each period, resulting in a cash flow sequence representing each loan. Assuming a collateral pool where prepayments are not an issue (e.g., auto loans), what is the step that merges this approach with a PMB based analysis?
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