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On this paper, we provide a common framework to find out a bank’s optimal LTV ratios within the monetary market with Knightian uncertainty. On this paper, we offer a general framework to find out a bank’s optimum loan-to-value (LTV) ratio when we consider the collateral value within the monetary market with Knightian uncertainty. This research makes the primary effort to introduce Knightian uncertainty into a common framework in determining collateral value when a bank seeks to arrange an optimal LTV ratio. The set of equivalent martingale measures is constituted from the set . That is, for any measurable event , define Clearly, when , there exists a singular equivalent martingale measure ; thus . One event isn't less than , and the other occasion is the borrower defaults.  
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