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Basic Question 6 of 16
Consider a corporate bond. Per 100 of par value, its exposure is 105, and recovery is 60. The probability of default (POD) is 1%. What is the expected loss due to credit risk?
B. 0.45
C. 0.48
A. 0.40
B. 0.45
C. 0.48
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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
describe the seniority rankings of debt, secured versus unsecured debt and the priority of claims in bankruptcy, and their impact on credit ratings
CFA® 2025 Level I Curriculum, Volume 4, Module 16.