Cumulative Default Probability Refers to

question 39

Multiple Choice

Cumulative default probability refers to

• A)probability that a borrower will default over a specified multi-year period.
• B)expected maximum change in the loan rate due to a change in the risk factor on the loan.
• C)historic default rate experience of a bond or loan.
• D)expected maximum change in the loan rate due to a change in the credit premium.
• E)probability that a borrower will default in any given year.

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Definitions:

Diminished Capacity

A legal defense where it is argued that a defendant was not fully able to understand their actions due to some form of mental impairment.

M'Naghten

A legal standard used to evaluate the criminal responsibility of a defendant claiming insanity, focusing on the ability to understand right from wrong at the time of the crime.

Durham

A city in North Carolina, known for its research universities and technological companies, or a historic city in Northeast England, famous for its Norman Cathedral.

Irresistible Impulse

A legal defense asserting that a defendant was unable to control their actions due to a mental illness, leading to a criminal act.