Which of the Following Is NOT a Valid Conceptual or Application

question 2

Multiple Choice

Which of the following is NOT a valid conceptual or application problem of the mortality rate approach to estimate default risk?

• A)Implied future probabilities are sensitive to the period over which MMRs are calculated.
• B)The estimates are sensitive to the number of issues in each investment grade.
• C)Syndicated loans seem to have higher mortality rates than corporate bonds.
• D)The estimated probability values are historic or backward-looking measures.
• E)The estimates are sensitive to the relative size of issues in each investment grade.

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