alleryStart learning →A lender has exposure of Rs 10,00,000, default probability 3% and severity 50%. What is expected loss?
ARs 15,000
BRs 30,000
CRs 5,000
DRs 1,50,000
Answer & Solution
Correct answer: A. Rs 15,000
Expected loss is 10,00,000 times 0.03 times 0.5, which equals Rs 15,000.
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