A
Acadi
Fi
Courses
Knowledge Hub
Community
Practice
Pricing
About
Search
⌘K
Question Bank
/
FRM
/
Part II
/
Credit Risk
Credit Risk
Medium
Under Basel regulatory capital frameworks, the use of eligible financial collateral most directly reduces the:
A
Exposure at Default (EAD) under the standardized approach or Loss Given Default (LGD) under the IRB approach
B
Probability of Default (PD) because collateral makes the borrower less likely to default
C
Risk weight of the borrower because collateral upgrades the credit rating
D
Maturity of the exposure because collateral shortens the effective duration
Select an answer to continue
Tags
#collateral
#ead
#lgd
#basel
#irb
More Credit Risk questions
Start full Part II quiz