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The credit value adjustment (CVA) is best described as: The cost of funding derivative positions The banks estimate of the PV of the expected cost
The credit value adjustment (CVA) is best described as:
- The cost of funding derivative positions
- The banks estimate of the PV of the expected cost to a bank of a counterparty default
- The PV of the expected gain to the bank from the possibility that it might itself default
- The cost of incremental capital that may be required to execute a derivative contract
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