Question: 1-Explain why Basel Rules require a maturity adjustment for corporate loans but not retail loans? 2-Explain why a bank may choose to hedge market risk

1-Explain why Basel Rules require a maturity adjustment for corporate loans but not retail loans?

2-Explain why a bank may choose to hedge market risk using stock index future rather than stock option?

3- Explain why the Sensitivities Based Method Risk Capital Requirement is based on the highest risk across three different correlation scenarios under the Forthcoming Sa for market Risk

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Basel Rules require a maturity adjustment for corporate loans but not retail loans because corporate loans typically have longer maturities compared to retail loans The maturity adjustment is intended ... View full answer

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