Enterprise Risk Management Slides

Stress testing / Liquidity and funding risk [27]

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Bullet points include: We could try, say, Pr(C|A) = 0.4, Pr(D|A) = 0.5, but Bayes theorem implies that: So conditional probabilities are still infeasible Could try Pr(D|B) = 0.3 and then Pr(D|A) is feasible but is 0.89 which is very different from its original level

Bullet points include: We could try, say, Pr(C|A) = 0.4, Pr(D|A) = 0.5, but Bayes theorem implies that: So conditional probabilities are still infeasible Could try Pr(D|B) = 0.3 and then Pr(D|A) is feasible but is 0.89 which is very different from its original level

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