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NEW QUESTION: 1
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F. Backup testing
Answer: C,D
NEW QUESTION: 2
Which of the following is not a parameter to be determined by the risk manager that affects the level of economic credit capital:
A. Confidence level
B. Risk horizon
C. Probability of default
D. Definition of credit losses
Answer: C
Explanation:
Explanation
Three parameters define economic credit capital: the risk horizon, ie the time horizon over which the risk is being assessed; the confidence level, ie the quintile of the loss distribution; and the definition of credit losses, ie whether mark-to-market losses are considered in addition to default-only losses. The probability of default is not a parameter within the control of the risk manager, but an input into the capital calculation process that he has to estimate. Therefore Choice 'c' is the correct answer.
NEW QUESTION: 3
A. Option D
B. Option A
C. Option B
D. Option C
Answer: C
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