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Basic Question 5 of 11

The loss given default in structural models is:

A. AT - K.
B. K - AT.
C. K - max[K - AT, 0]
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User Contributed Comments 1

User Comment
davidt876 and C would be the value of the debt given default?
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I used your notes and passed ... highly recommended!
Lauren

Lauren

Learning Outcome Statements

explain structural and reduced-form models of corporate credit risk, including assumptions, strengths, and weaknesses;

CFA® 2025 Level II Curriculum, Volume 4, Module 29.