Question: 4. Suppose a mark-to-market (MTM) is defined by a normal distribution with mean of 2% and standard deviation of 5%. Which of the following is

4. Suppose a mark-to-market (MTM) is defined by a normal distribution with mean of 2% and standard deviation of 5%. Which of the following is false about the expected exposure?

A. The EE only concerns itself with positive MTM values.

B. The EE is greater than the 95% confident level potential future exposure (PFE).

C. An increase in the mean will increase the EE.

D. An increase in the standard deviation assumption will lead to higher EE.

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