Multiple Choice
Assume a $500 000 loan has a duration of 2.5 years.The current interest rate level is 10% and a sudden change in the credit premium of 1% is expected.Further assume that the one-year income on the loan is $2500.What is the loan's RAROC (round to two decimals) ?
A) 10.00%
B) 11.00%
C) 22.00%
D) 50.00%
Correct Answer:
Verified
Correct Answer:
Verified
Q1: Term structure of credit risk approach models
Q2: The term 'spot loan' refers to a
Q3: Assume that i<sub>1</sub> = 11% and i<sub>2</sub>
Q5: The estimate of loan (or capital) risk
Q6: Which of the following statements is true?<br>A)Arbitrage
Q7: By selecting and combining different economic and
Q8: Consider the following scenario: an FI charges
Q9: Consider the following data of a
Q10: Compensating balance is a proportion of:<br>A)a loan
Q11: The term disintermediation refers to the process