In this zone, the transition matrices are played in the future until the last loan maturity.

![Positions Forecasts Zone.png](6dnp8RCCC7D9)

The [python recipe](recipe:compute_probability_default_updates) takes as input the transition matrices and the EAD dataset. The EAD dataset is only used to get all the dates for which transitions must be computed. Then, for each starting credit status, for each scenario, we propagate the UPB from the last known position accross time. These transitions matrices also contain the probability to default that will be used to compute future default rates. EAD is normalized in this propagation, so that it starts at 1 fro each initial credit status, and decreases progressively as when they reach the default state, they don't propagate anymore.

In the following [prepare recipe](recipe:compute_future_default_rates) we keep only transitions to default to have our final future default rates, and rename the EAD column to default_rate.