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Problem. 01: An FI has set a maximum loss of 12 per cent of total capital as a basis for setting concentration limits on loans

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Problem. 01: An FI has set a maximum loss of 12 per cent of total capital as a basis for setting concentration limits on loans to individual firms. If it has set a concentration limit of 25 per cent to a firm, what is the expected loss rate for that firm? Solution

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