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Basic Question 7 of 9
Consider a corporate bond. Per 100 of par value, its exposure is 105, and recovery is 60. The probability of default (POD) is 1%. What is the expected loss due to credit risk?
B. 0.45
C. 0.48
A. 0.40
B. 0.45
C. 0.48
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I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
explain expected exposure, the loss given default, the probability of default, and the credit valuation adjustment;
CFA® 2025 Level II Curriculum, Volume 4, Module 29.