A Hypothetical Rating Migration, or Transition Matrix, reflects all of the following EXCEPT
A. rating at which the portfolio ended the year.
B. transition probabilities.
C. rating at which the portfolio of loans began the year.
D. future migration expected in the portfolio.
E. the average proportions of loans that began the year.
Ans: D. future migration expected in the portfolio.
You might also like to view...
In what section of the statement of cash flows would the purchase of office equipment for $10,000 cash appear?
A. Operating activities B. Investing activities C. Financing activities D. In the notes to the statement of cash flows
The one-year interest rate is 4%. The interest rate for a two-year security is 6%. The one-year
interest rate one year from now is 8.34%. According to the liquidity preference theory, the risk premium for the second one-year investment is A) 0.34%. B) 0.50%. C) 1.66%. D) 0.30%.