Which of the following is a key factor considered in

Q: Answer-Which of the following is a key factor considered in calculating the Loss Given Default (LGD) in cre...

Loss Given Default LGD refers to the potential loss a lender faces in the event of default, after accounting for the recoveries that can be made through collateral, guarantees, and other mechanisms. LGD is one of the three components that are required for estimation of credit risk under the expected loss model. The other two components are Probability of default PD and Exposure at default EAD.

calculating the Loss Given Default (LGD) in credit risk models?

A The total outstanding debt of the borrower at the time of default

B The probability that the borrower will default on the loan

C The number of recoveries likely to be made post-default, considering collateral and guarantees.

D The borrower’s credit history and repayment track record

E The market value of the borrower’s stock at the time of default

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Which of the following is a key factor considered in

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