In the Moody's Analytics Portfolio Model, the Expected Loss on a Loan

question 42

Multiple Choice

In the Moody's Analytics portfolio model, the expected loss on a loan is

• A)the product of the estimated loss given default and risk-free rate on a security of equivalent maturity.
• B)annual all-in-spread minus the loss given default.
• C)annual all-in-spread minus the expected default frequency.
• D)the product of the expected default frequency and the estimated loss given default.
• E)the volatility of the loan's default rate around its expected value.

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Definitions:

Uranium Isotope

Variants of the uranium atom that have the same number of protons but different numbers of neutrons in their nuclei.

Atomic Weapons

Weapons that derive their destructive power from the release of atomic energy through processes involving nuclear fission, fusion, or a combination of both.

Critical Mass

The minimum amount of fissile material needed to maintain a nuclear chain reaction for a nuclear explosion or a reactor.

Chain Reaction

A series of reactions where a reactive product or by-product causes additional reactions to take place, often leading to a self-sustaining sequence.