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@David Harper CFA FRM - Definitely very helpful to illustrate with numbers here. @Torsleno - Thanks for helping as well.

Hi everyone, Economic Capital (EC) was introduced in Chapter 1 as risk capital being used to absorb Unexpected Loss (UL) and is express as multiple of UL. <Page 4> However, when taken into account in relation to RAROC, it was said that EC is a risk measure that includes both UL and Expected...