Multiple Choice
Which of the following statements is true?
A) RAROC is the risk-adjusted return on capital.
B) RAROC is calculated as the capital at risk divided by the loan's income.
C) RAROC should always be below an FI's RAROC benchmark as otherwise the FI increases its default risk exposure.
D) None of the listed options are correct.
Correct Answer:
Verified
Correct Answer:
Verified
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