FIN450_Quiz12

When we want to do a forecast of credit risk, it is better to use:

• Structural models

• Reduced form models

• Intensity based models

To better price default bearing securities, we should use:

• Structural models

• Equity models

• Reduced form models

Money laundering is an:

• Internal fraud risk

• External fraud risk

• Client and commercial practices risk

Copula functions are used to:

• Measure how functions are copulating

• Correlate two independent single distribution

• Create gaussian correlation between single distributions

Insurance allows to reduce:

• The operational risk probability

• The operational risk impact

• The operational risk occurrence