Question
If a banks concentration limit is 0.35 (i.e., 35 percent of capital), and its expected recovery from defaulted loans is 0.3 (i.e., 30 percent of
If a banks concentration limit is 0.35 (i.e., 35 percent of capital), and its expected recovery from defaulted loans is 0.3 (i.e., 30 percent of contractually promised principal and interest payments), what is the maximum loss it permits to affect its capital in the event of a default?
(Please put your answer in decimals (not in percentage points) and round your answer to the 2 decimal places)
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Corporate Finance Core Principles and Applications
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford
3rd edition
978-0077971304, 77971302, 978-0073530680, 73530689, 978-0071221160, 71221166, 978-0077905200
