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QUESTION 3 Commonwealth Bank owns a portfolio of 10 AA-rated bonds with a total value of $200 million. The one-year probability of default for each

QUESTION 3 Commonwealth Bank owns a portfolio of 10 AA-rated bonds with a total value of $200 million. The one-year probability of default for each issuer is 5% and the recovery rate for each issue equals 40%. What is the one-year expected loss of the portfolio? $4 million $5 million $6 million $8 million

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