You Are Assessing a Credit Portfolio with 100 Issuers Where

question 5

Multiple Choice

You are assessing a credit portfolio with 100 issuers where the hazard rate of default of each name is 0.05. The default correlation of all firms (pairwise) is zero. What is the average time it will take for 10% of the portfolio to default?

• A) 1/5 year
• B) 1/2 year
• C) 1 year
• D) 2 years

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Definitions:

Household Goods

Items and possessions within a living space that are used in everyday life, such as furniture, appliances, and home textiles.

Pre-Move

Activities or expenses that occur before relocation, potentially relevant for tax deductions related to moving.

Health Savings Account

A tax-advantaged savings account available to taxpayers enrolled in high-deductible health plans, used to pay for eligible medical expenses.

Employer Contributions

Payments made by an employer into employees' benefits or retirement plans, which are often tax-deductible for the employer.