Dependence And Scenario Constraints
Why This MattersRead the earlier reference in its original context, with its historical statements and limits preserved.
Distinguish separate income records from shared exposure, then examine the stated scenarios. Concentration describes the declared grouping; it is not a probability of loss.
Report source-level and common-group shares separately. Two people earning equal amounts from one employer may have two source records but one employment-risk group. H is descriptive concentration, not an estimated loss probability, and it does not substitute for a covariance model.
Three Cash-Screen Labels
| Label | Meaning |
|---|---|
| WITHIN DISCLOSED CASH CONSTRAINTS | No modeled month-end falls below the chosen reserve floor. This is not an overall approval. |
| RESERVE POLICY BREACH | Cash remains nonnegative but falls below the chosen floor at least once. Revisit the policy, action or funding. |
| PROJECTED UNFUNDED CASH NEED | A modeled opening or month-end balance is negative. Name a feasible remedy; do not silently assume borrowing. |
Scenario selection should include plausible joint failures, such as job loss alongside weak rental demand or a medical bill during reduced work hours. No probabilities are assigned in v0.2. The worst included case is not a guarantee about the worst possible event.
Do not combine liquidity, reputation, mood and dignity in a weighted freedom score. Present the financial measures with separate qualitative constraints and the person’s stated priorities. Unknown inputs remain unknown and block a complete calculation.