easy · FRM Part 2 Credit Risk
Formula-and-meaning check before application in Credit Risk.
Within Credit Risk — xVA (CVA/DVA/FVA), which statement correctly describes Credit valuation adjustment?
- reduction in derivative value for expected counterparty credit loss
- own-credit adjustment reflecting possible nonpayment by the valuing institution
- adjustment for funding costs or benefits associated with an uncollateralized derivative
- posting assets or cash to reduce unsecured counterparty exposure
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