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:

Real Assets

Physical or tangible assets that have intrinsic value, such as real estate, commodities, and natural resources.

Real Assets

Physical assets such as real estate, commodities, and natural resources that have intrinsic value.

Plant and Equipment

Tangible long-term assets owned by a business, used in the production or supply of goods and services, such as machinery and buildings.

Limited Liability

A legal structure that limits the financial liability of the owners to the amount of money they invested in the company.