a) Calculate Expected Loss (EL) of exposures at Probability of Default (PD) of 0.04.7% and 0.146% respectively.

b) Explain risk appetite of the bank based on the PD of the non-retail exposures.

c) What is the meaning of Loss Given Default (LGD) at 44.6%?

d) Rising interest rates will increase cost of debt servicing and many companies with high PD and LGD may default on their financing obligation. In what way can the investment account fund (IAF) act as a risk mitigant against business fallouts from rising interest rates.

e) Explain how price risk in Tawarruq financing is mitigated and also explain the loss to the bank if price risk is allowed to affect the value of the sale and purchase transactions.

Table 18: Disclosure on Exposure by PD Band (IRB Approach) for Non-Retail for Maybank Table 18: Disclosure on Exposure by PD Band (IRB Approach) for Non-Retail for Maybank