Practice
Check your answer
Write your response and explain your reasoning.
Use the four-pool matrix in the worked example. Reperform the allowance, then write a model-review note that distinguishes a calculation failure from an unsupported but arithmetically valid input.
Compare your reasoning with the worked answer
Adjusted rates are 0.5%, 1.5%, 6%, and 20%; expected losses are $900, $1,200, $2,400, and $6,000, totaling $10,500. A green tie does not validate history, pool design, adjustments, forecast, or recoveries.