What makes credit risk more difficult for quantification and backtesting than market risk?

Question:

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Value at Risk The New Benchmark for Managing Financial Risk

ISBN: 978-0071464956

3rd edition

Authors: Philippe Jorion

See More Books

Question Posted: May 03, 2016 02:24 AM

See More Questions

(Multiple choice) 1. In a fraud investigation, documents: a. Usually contain extremely valuable information. b. Are rarely used in court. c. Are not reliable sources of information. d. Are only...
What makes the doctrine of confidentiality more difficult to grasp in cases where the client is an organization, such as a corporation?
Why is credit risk modeling more difficult than interest-rate modeling?
Bob drives off in Freds car mistakenly believing that it is his. Is this theft? Explain.
Minturn Enterprises, Inc., operates as three autonomous companies, each with a chief executive officer who oversees its operations. At a recent corporate meeting, the company CEOs agreed to adopt...
Explain the term bounded rationality. LO.1
What lessons do these recruiters have for graduates seeking entry-level technical and professional jobs? LO.1
Consider the following data: (a) Calculate the Solow residual for each year from 1995 to 2007. (b) Calculate percentage rates of growth in output, capital, employment, and total factor productivity...
Page of 4 0 9. Torque Co. has equipment with a carrying amount of $2,400,000. The expected future net cash flows from the equipment are $2,445,000, and its fair value is $2,040,000. The equipment is...
If Kelly can make monthly payments of $725 for 20 years, how much money could she borrow at 6.9% compounded semi-annually? $ 94,241 $117,324 $ 87,497 $ 94,956 $118,197
The Basel II capital charges are additive. Generally, economic capital cannot be decomposed into a simple sum. Explain the meaning of portfolio invariance and how this is applied to the Basel II...
Explain why the distribution of credit-risk gains and losses is similar to a short position in an option. Discuss loans and derivatives.
To use substitution to determine 2xx 2 - 5 dx, let u = x 2 - 5. Determine whether each statement is true or false, and explain why.
Choose a private label product that you have seen and discuss the possible reasons for why the particular retailer introduced this private label product and explain its features in detail.
Understanding your behaviors can help you become a better leader. As discussed in module 4 our beliefs & values can be summed up as our 'personality'. In this assignment you are to examine your own...
This week we learned about assessing competition. Watch the video the History of the Cola Wars and answer the following questions. Using the frameworks from the text and the online lesson, why is...
Prior to developing your training programs, you must analyze your organizational military needs, identify employee skills gaps based on performance, and have resources available to support training...
Describe specifically how your firm's culture lines up with the bullet points listed for that firm . For instance, if you believe your organization's strategy priority is creativity-driven , then...
Problems 914 pertain to the following inputoutput model: Assume that an economy is based on two industrial sectors, agriculture (A) and energy (E). The technology matrix M and final demand matrices...
Ask students to outline the reasons why the various elements of culture (social structures and control systems, language and aesthetics, religion and other belief systems, educational systems, etc.)...
The Clap Chemical Company needs a large insulated stainless see tank for the expansion of its plant. Clap has located such a tank at a recently closed brewery. The brewery has offered to sell the...
The plant manager has just purchased a piece of unusual machinery for $10,000. Its resale value at the end of 1 year is estimated to be $3000, because the device is sought by antique collectors,...
In a replacement analysis problem, the following facts are known: Initial cost $12,000 Annual Maintenance None for the first 3 years $2000 at the end of the fourth year $2000 at the end of the fifth...
Old MathJax webview i need Compute key financial ratios all financial ratios are required B D 2020 2019 9,169 118,378 18,423 1,839 10,244 10,748 1,648 3,963 11,048 185,460 8,822 97,719 17,417 731...
L> Moving to another question will save this response Question 1 Which of the following statements is true? o When corporate governance is strong managers may demand excessive pay O When corporate...
Document Malings Review View W Design Layout References ody - 12 - A A A A U. XX A. AD Aalto ABECEDE A AaBbc Acid 2) The Duranceau company has great difficulty controlling its indirect manufacturing...

What makes credit risk more difficult for quantification and backtesting than market risk?

Question:

Step by Step Answer:

Because credit events occur with low frequency it is harder to quantify default ...View the full answer

Value at Risk The New Benchmark for Managing Financial Risk

Students also viewed these Finance questions