When Banks Calculate the Losses the Institution Would Incur If

question 100

Multiple Choice

When banks calculate the losses the institution would incur if an unusual combination of bad events happened,the bank is using the ________ approach.

• A)stress-test
• B)value-at-risk
• C)trading-loss
• D)maximum value

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Definitions:

Sustainable Growth Rate

The highest speed at which a firm can increase its revenue, profits, and dividends without raising its financial borrowing.

External Financing

Funds raised from sources outside the organization, typically through borrowing or issuing equity.

Sales Growth

The percentage increase in sales over a specified period of time, indicating the health and success of a business.

Worst Case Scenario

The most severe or unfavorable outcome that may happen in a given situation.