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How can I use the recovery rate?

The recovery rate helps you to understand how much of the principal balance of loans in default you are likely going to receive. This figure can then be used to adjust future cash flows and to arrive at a risk-adjusted yield-to-maturity state of your Bondora portfolio. You can do this for your portfolio through the Cash Flow page Settings section. The Forecast settings give recommended ratios calculated on your portfolio historic cash flow that you can use, instead of taking them from recovery rate charts.