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

question 56

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.

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Definitions:

Corporate Responsibility

The ethical and moral obligation of companies to consider the impacts of their activities on stakeholders and the environment.

Shareholder Theory

The belief that the primary responsibility of a corporation is to maximize the wealth of its shareholders.

Utilitarianism

A philosophical theory that suggests the best action is the one that maximizes utility, usually defined as that which produces the greatest well-being of the greatest number of people.

Toxic Environment

Conditions in a workplace or other environment that are harmful to employees' or inhabitants' health, well-being, or performance, often due to dangerous chemicals or a hostile work culture.