Which of the following are the components that are required to be estimated for credit risk quantification?
1. Probability of default
2. Expected Loss
3. Exposure at default
4. Loss Given default
The expected loss is the amount a lender might lose by lending to a borrower. The components of expected loss are: Probability of default (or PD) is the likelihood that a borrower would not be able (or would not be willing) to repay their debt in full or on time. In other words, it is an estimate of the likelihood that the borrower would default. Usually, PD refers to a particular time horizon. Loss given default (or LGD) is the share of an asset that is lost if a borrower defaults. It is the proportion of the total exposure that cannot be recovered by the lender once a default has occurred. Exposure at default (or EAD) is the total value that a lender is exposed to when a borrower defaults. Therefore, it is the maximum that a bank may lose when a borrower defaults on a loan.
How do you approach new people or social situations?
How do you balance your own needs and desires with those of others?
How often do you seek out new experiences or adventures in life?
How likely are you to engage in risky behaviours or activities, even if they could have negative consequences?
How do you typically respond to failure?
How often do you take risks in your personal or professional life?
How do you handle situations where you are required to work with people who have vastly different personalities or work styles than your own?
How do you handle change?
How do you usually feel in social situations?
How do you handle change in your life?