What is the cost of expected losses

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Reference no: EM132016087

1. The expected loss rate for a customer is .50%, the 99% confidence interval VaR is 8 cents per dollar, the bank's cost of funding is 5.5%, and the cost of bank equity capital is 10%. Enter your answers to the following questions as decimals with four places of precision and precede the decimal with a zero (0.1234).

What is the cost of expected losses =

What is the cost of unexpected losses =

What is the loan rate to customers =

2. Duration can be used to measure interest rate shocks that are the consequence of changes in credit quality.

True

False

3. The net stable funds ratio (NSFR) is a shorter-term measure than the liquidity coverage ratio (LCR).

True

False

Reference no: EM132016087

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