Risk-adjusted return on capital (RAROC) models serve as both a credit risk measure and a pricing tool for a loan officer.

Name: Risk-adjusted return on capital (RAROC) models serve as both a credit risk measure and a pricing tool for a loan officer.
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RAROC models are commonly used in banks to determine the profitability of a loan while taking credit risk into consideration. Therefore, it serves as both a credit risk measure and a pricing tool for a loan officer.

Risk-Adjusted Return on Capital (RAROC) Models Serve as Both a Credit