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    Fixed Income Analysis
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    Exam 6: Fundamentals of Credit Analysis
  5. Question
    The Expected Loss for a Given Debt Instrument Is Estimated
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The Expected Loss for a Given Debt Instrument Is Estimated

Question 44

Question 44

Multiple Choice

The expected loss for a given debt instrument is estimated as the product of default prob- ability and:


A) (1 + Recovery rate) .
B) (1 − Recovery rate) .
C) 1/(1 + Recovery rate) .

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