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Under Foundation IRB, the bank itself estimates which input for each borrower?
AProbability of Default
BLoss Given Default
CExposure At Default
DSupervisory risk weight
Answer & Solution
Correct answer: A. Probability of Default
1. FIRB splits the work between bank and supervisor.
2. The supervisor supplies LGD and EAD.
3. The bank estimates PD.
_Source: Reserve Bank of India, Glossary (rbi.org.in)._
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