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The LGD calculation is easily understood with the help of an example: If the client defaults with an outstanding debt of $200,000 and the bank or insurance is able to sell the security (e.g. a condo) for a net price of $160,000 (including costs related to the repurchase), then the LGD is 20% (= $40,000 / $200,000).
Expected loss is the sum of the values of all possible losses, each multiplied by the probability of that loss occurring.. In bank lending (homes, autos, credit cards, commercial lending, etc.) the expected loss on a loan varies over time for a number of reasons.
The economic calculation problem (ECP) is a criticism of using central economic planning as a substitute for market-based allocation of the factors of production. It was first proposed by Ludwig von Mises in his 1920 article " Economic Calculation in the Socialist Commonwealth " and later expanded upon by Friedrich Hayek .
The Chennai branch recorded sales of bonds worth ₹122 crore, while the Bengaluru branch sold bonds worth ₹46 crore. In terms of bond encashment, the New Delhi branch saw redemption of bonds valued at ₹565.79 crore. Subsequently, the Kolkata branch redeemed bonds worth ₹186.95 crore. [35]
The term Advanced IRB or A-IRB is an abbreviation of advanced internal ratings-based approach, and it refers to a set of credit risk measurement techniques proposed under Basel II capital adequacy rules for banking institutions.
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EVA calculation: EVA = net operating profit after taxes – a capital charge [the residual income method] therefore EVA = NOPAT – (c × capital), or alternatively EVA = (r × capital) – (c × capital) so that EVA = (r − c) × capital [the spread method, or excess return method] where r = rate of return, and
Calculation in kind or calculation in-natura is a way of valuating resources and a system of accounting that uses disaggregated physical magnitudes as opposed to a common unit of calculation. As the basis for a socialist economy , it was proposed to replace money and financial calculation. [ 1 ]