Bank Phoenix gives two one-year loans of N$ 20 million loan to Mr A, and N$ 85 million to Mrs B. The joint probability of default for Mr A and Mrs B is 0.095. Mr A probability of default and LGD are respectively 0.3 and 35%. Mrs B probability of default and LGD are respectively 0.35 and 55 %. Calculate bank PHOENIX one-year expected loss of default.
Bank Phoenix gives two one-year loans of N$ 20 million loan to Mr A, and N$ 85 million to Mrs B. The joint probability of default for Mr A and Mrs B is 0.095. Mr A probability of default and LGD are respectively 0.3 and 35%. Mrs B probability of default and LGD are respectively 0.35 and 55 %. Calculate bank PHOENIX one-year expected loss of default.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Bank Phoenix gives two one-year loans of N$ 20 million loan to Mr A, and N$ 85 million to Mrs B. The joint probability of default for Mr A and Mrs B is 0.095. Mr A probability of default and LGD are respectively 0.3 and 35%. Mrs B probability of default and LGD are respectively 0.35 and 55 %. Calculate bank PHOENIX one-year expected loss of default.
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