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Post by propman on Nov 7, 2019 14:50:27 GMT
Concentration of loans will increase the variability of return but should not change the average which should be the portfolio average (although there will be some variation in median depending upon number of people with a significant proportion of their investment during periods of higher defaults).
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trium
Member of DD Central
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Post by trium on Nov 8, 2019 5:22:43 GMT
When [the matching algorithm] was first introduced they did say that the averaging was over a relatively short period and so would not have made sence to include defaults, but I assume it has been amended since I'm pretty sure the original implementation only took account of the last 20 loans. If one of your 20% plums repaid early/straight away you were not served another one to make up for it. That seems an inadequate sample but of course, as you suggest, things may have changed since
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