Question
Hey having some trouble with this tute question some help would be very much appreciated. thanks Answer the following questions regarding to analysing loan portfolio
Hey having some trouble with this tute question some help would be very much appreciated. thanks
Answer the following questions regarding to analysing loan portfolio information, show your workings for the calculation:
- Use the following information to establish how much Bank A's loan portfolio deviates from the national average:
| Bank A | National Ave. | |
| Consumer loans | 55% | 40% |
| Overdrafts | 10% | 5% |
| Business loans | 15% | 20% |
| Mortgage | 20% | 35% |
| 100% | 100% |
2. Assume the standard deviation calculated in part a. of this question for Bank A is very large compared to the standard deviation of other banks. Is it necessarily bad for Bank A?
3. A sample of 5,000 customers of similar size and activity have been observed. On average 75 have defaulted on their obligations per year and only 25 % of the outstanding debt could be recovered. The average exposure per customer is $50,000. Use the ACRA principle and calculate the total expected loss and the "credit risk premium" per customer.
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Financial Accounting Theory
Authors: William R Scott
5th Edition
0132072866, 978-0132072861
