MGCR 222 Lecture Notes - Lecture 1: Credit Score In The United States, Net Present Value, One Unit

• School: McGill University
• Department: Management Core
• Course: MGCR 222
• Professor: Ferguson

Document Summary

Capital one financial corporation : setting and shaping strategy. Whatever competitive advantage that they had, was something that they could do better than another credit card company. Though the company itself is really old, it developed a competitive advantage around data analytics. What had to be put in place in order for this company to grow. Fairbank develops a business plan, shops it around to banks, fails over and over again. Spread between the money they borrow and the money they lend. 363 rule, you borrow at 3%, you lend at 6% This is a publicly available piece of information for every borrower. Banks look at it when deciding to make a loan. Issue: so many individual differences that are not picked up by fico. So the best that you can do, is assume the mean probability. The interest rate is what changes when it comes to giving credit cards to people with different scores in fico.