Consider the following table. And consider a Ba-rated Company. With X we indicate the standardized asset value
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Question:
Consider the following table. And consider a Ba-rated Company. With X we indicate the standardized asset value of the company at the end of year 1.
Rating at the end of year 1 (%)
Internal Rating | Aaa | Aa | A | Baa | Ba | B | Caa | Ca-c | DFF |
Aaa | 90.42 | 8.92 | 0.62 | 0.01 | 0.03 | 0.00 | 0.00 | 0.00 | 0.00 |
Aa | 1.02 | 90.12 | 8.38 | 0.38 | 0.05 | 0.02 | 0.01 | 0.00 | 0.02 |
A | 0.06 | 2.82 | 90.88 | 3.52 | 0.51 | 0.11 | 0.03 | 0.01 | 0.06 |
Baa | 0.05 | 0.19 | 4.79 | 89.41 | 4.35 | 0.82 | 0.18 | 0.02 | 0.19 |
Ba | 0.01 | 0.06 | 0.41 | 6.22 | 83.43 | 7.97 | 0.59 | 0.09 | 1.22 |
B | 0.01 | 0.04 | 0.14 | 0.38 | 5.32 | 82.19 | 6.45 | 0.74 | 4.73 |
Caa | 0.00 | 0.02 | 0.02 | 0.16 | 0.53 | 9.41 | 68.43 | 4.67 | 16.76 |
Ca-C | 0.00 | 0.00 | 0.00 | 0.00 | 0.39 | 2.85 | 10.66 | 43.54 | 42.46 |
The Company defaults if X is smaller than/equal to..............
The company moves to the Ca-C-class if X is larger than.............and smaller than/equal to .................
Related Book For
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott
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