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Updated: May 30, 2026
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1. Which of the following is not true about the ISDA master agreement (ISDA MA):
A) The CSA (Credit Support Annex) is one of the parts of the ISDA MA
B) All transactions under the ISDA MA are considered separate obligations
C) The ISDA MA describes events of default, and termination events
D) The ISDA MA describes the close out process
2. In setting confidence levels for VaR estimates for internal limit setting, it is generally desirable:
A) that actual losses exceed the VaR estimates with some reasonably observable frequency that is neither too high nor too low
B) that actual losses never exceed the VaR estimates
C) that actual losses very frequently exceed the VaR estimates
D) that actual losses exceed the VaR estimates on only the rarest of occasions
3. Which of the following belong in a credit risk report?
A) Exposures by industry
B) Largest exposures by counterparty
C) Exposures by country
D) All of the above
4. When compared to a low severity high frequency risk, the operational risk capital requirement for a medium severity medium frequency risk is likely to be:
A) Unaffected by differences in frequency or severity
B) Lower
C) Zero
D) Higher
5. Under the contingent claims approach to credit risk, risk increases when:
I. Volatility of the firm's assets increases
II. Risk free rate increases
III. Maturity of the debt increases
A) I, II and III
B) I and III
C) I and II
D) II and III
Solutions:
| Question # 1 Answer: B | Question # 2 Answer: A | Question # 3 Answer: D | Question # 4 Answer: D | Question # 5 Answer: B |
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