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It is assumed that a company can default after one year or after two years.The probability of default at each time is 1.5%.The present value of the expected loss to a bank on a derivatives portfolio if the company defaults after one year is estimated to be $1 million.The present value of the expected loss if it defaults after two years is estimated to be $2 million.Which of the following is the bank's CVA ?
Reaction
A process in which one or more substances are changed into one or more new substances through the reorganization of molecular or ionic structures.
Major Organic Product
The primary product of a chemical reaction, typically formed in the greatest amount compared to other products.
Methylpropane
Another term for isobutane, a branched alkane with the formula \(C_4H_{10}\), used as a refrigerant and a propellant in aerosol sprays.
Methyl Isobutyrate
An organic compound with the formula C5H10O2, used as a flavoring agent and solvent.
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