An analyst developed two scenarios with respect to the recovery of USD100,000 principal from defaulted loans: The

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An analyst developed two scenarios with respect to the recovery of USD100,000 principal from defaulted loans:

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The amount of the expected recovery is closest to which of the following?
A. USD36,400.
B. USD55,000.
C. USD63,600.

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2024 CFA Program Curriculum Level I Volume 1

ISBN: 9781953337672

1st Edition

Authors: CFA Institute

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Question Posted: Feb 01, 2024 08:29 AM

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An analyst developed two scenarios with respect to the recovery of USD100,000 principal from defaulted loans: The

Question:

Scenario 1 2 Probability of Scenario (%) 40 60 Amount Recovered (USD) 50,000 30,000 80,000 60,000 Probability of Amount (%) 60 40 90 10

Step by Step Answer:

C is correct If Scenario 1 occurs the expected recovery is 60 USD50000 40 USD30000 USD420...View the full answer

2024 CFA Program Curriculum Level I Volume 1

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