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Questions and Answers
What is the traditional credit risk related to?
What is the traditional credit risk related to?
- Default on payments (correct)
- Losses from counterparty failure
- Failure of large organizations
- Settlement risk in financial derivatives
What is the likelihood of default known as?
What is the likelihood of default known as?
- Counterparty risk
- Probability of default (correct)
- Pre-settlement risk
- Settlement risk
Where does counterparty risk arise from?
Where does counterparty risk arise from?
- Settlement risk
- Failure of large organizations
- Lending or sales
- Financial markets (correct)
What is pre-settlement risk also known as?
What is pre-settlement risk also known as?
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How can losses from the failure of a counterparty be evaluated?
How can losses from the failure of a counterparty be evaluated?
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What is default risk primarily concerned with?
What is default risk primarily concerned with?
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What does the probability of default refer to?
What does the probability of default refer to?
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Why is credit risk often considered a one-way risk?
Why is credit risk often considered a one-way risk?
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