Hi David,
regarding the question - Why banks should not rely solely on external credit ratings assigned to securitization exposures (option a)?
In basel 2 (p 609) it's written that we must use RBA, unless a rating can't be inferred / unavailable.
Am I missing something?
Thanks,
Ohad
Hi David,
I have a theory, which ironically I got from a video you posted a few years ago regarding the positive/negative basis trade: (its a way to test my understanding as well)
Maybe the funding cost is the repo rate (which is Libor equivalent per the example), and the spread is based...
Hi David,
I have a theory, which ironically I got from a video you posted a few years ago regarding the positive/negative basis trade: (its a way to test my understanding as well)
Maybe the funding cost is the repo rate (which is Libor equivalent per the example), and the spread is based...
Hi,
Can you please explain why portfolio A is more peaked according to the answers?
KA = 3.7, which means it should have a lower peak than a normal distribution:
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