- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 14. Credit Risk
- Subject 1. Sources of Credit Risk
CFA Practice Question
In its calculation the expected loss include:
II. loss given default.
III. time value of money.
IV. risk premium.
I. default probability.
II. loss given default.
III. time value of money.
IV. risk premium.
Correct Answer: I and II
The present value of the expected loss includes all four factors. The expected loss itself includes I and II only.
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