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Nowadays, the sovereign credit rating is not only an index of a country's economic performance and political stability but also an overall indicator of development and growth, as well as the trust factor that is associated with the country. Due to its importance, the vast amount of available information, and the lack of a closed-form solution, prediction models based on machine learning (ML) and computation intelligence (CI) techniques are being increasingly used to complement traditional financial approaches. In this paper, we aim to introduce a novel ML-CI approach for sovereign credit rating prediction based on a differential evolution (DE) algorithm and interpolative Boolean algebra (IBA). In fact, the proposed approach is based on a pseudo-logical function in the IBA framework derived from the historical data of publicly available indicators using the DE algorithm. Such functions are easily interpreted and enable a subtle gradation among countries. It is shown that the IBA-DE approach outperforms back-propagation neural networks on the observed problem while also providing a deeper insight into each of the indicators used for prediction and its respective influence on the prediction rating on the other. [ABSTRACT FROM AUTHOR]

One of the main issues in IFS theory are generalizations of intuitionistic fuzzy set (IFS) definition as well as IFS operations. In this paper, we present the LBIFS-IBA approach by applying operations based on interpolative Boolean algebra (IBA) on generalized IFS. Namely, LBIFS are defined as a special case of Liu's generalized IFS with the maximal interpretational surface. By extending the interpretational surface, the descriptive power of the approach is enhanced, and therefore the problematic situations when μ A + ν A > 1 can be modeled. In addition, IBA-based algebra secures Boolean properties of the proposed approach. Considerable attention is given to comprehension of uncertainty within LBIFS-IBA, i.e., we propose a novel manner of uncertainty interpretation by treating values from [−1,1] interval. In order to prove its importance, we compare LBIFS-IBA with several well-known IFS generalizations, showing that only our approach offers meaningful uncertainty interpretation is all selected cases. Additionally, we illustrate the practical benefits of LBIFS-IBA by applying it to an example of modeling Japanese candlesticks for price charting and paying special attention to uncertainty interpretation. [ABSTRACT FROM AUTHOR]