Which of the following is NOT a conceptual definition of credit risk on which credit models are based?

Question

Quizplus · Accepted Answer

The Value-at-Risk paradigm is actually a methodology used in risk management that estimates the potential loss in value of a portfolio of assets or liabilities over a certain time period and a given level of confidence. It is not a conceptual definition of credit risk on which credit models are based. The Default Mode and Mark-to-Market paradigms, on the other hand, are two of the main conceptual definitions of credit risk that credit models use to assess the probability of default and the potential loss given default.

Which of the Following Is NOT a Conceptual Definition of Credit