In applying the loan loss ratio models,the loss rate "$\beta$" for the whole loan portfolio is

Question

Quizplus · Accepted Answer

The loss rate "F1F1F1S1F1F1F10" represents the expected loss rate for the entire loan portfolio. According to the formula, the loss rate is equal to the product of the default probability (F1F1F1S1), the severity of loss given default (β), and the exposure at default (F1F1F10). Assuming that there is a non-zero default probability and non-zero exposure at default, the loss rate will be positive. Therefore, the only viable option is C, which corresponds to a loss rate of 1.

In Applying the Loan Loss Ratio Models,the Loss Rate β\betaβ " for the Whole Loan Portfolio Is A)0

In Applying the Loan Loss Ratio Models,the Loss Rate $\beta$ " for the Whole Loan Portfolio Is
A)0