Question 9 (a) Describe three different approaches to modelling credit risk
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Question 9
(a) Describe three different approaches to modelling credit risk.
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- 3. What is meant by credit risk analysis?Credit risk refers to: Question 10 options: Risk from reclassification of the creditworthiness of the borrower Risk from a change to the interest rate on a loan Risk of a change to the repayment schedule of a loan Risk of a change to the maturity of a credit1. Demonstrate how this credit risk management issue can be resolved through the application of a risk management model 2. Discuss how this model can mitigate future credit risk issues for Washington Mutual.
- QUESTION THREE (3)Explain in detail each of the following primary risks faced by banks and explain how theyare managed.A. Credit risk,B. Liquidity risk,C. Interest rate risk, andD. Foreign exchange riskDiscuss the relationship between Credit View and Monetary Policy.How to define credit risk and how to limit that risk.
- Repricing risk refers to: Question 11 options: Risk of a change to the maturity of a credit Risk from a change to the interest rate on a loan Risk from reclassification of the creditworthiness of the borrower Risk of a change to the repayment schedule of a loanQ4: From the standpoint of a borrower, is long-term or short-term credit riskier?Demonstrate how this credit risk management issue can be resolved through the application of Term Structure of Credit Risk Approach model?