Question: Good day Please see attached document that contains the table highlighted in yellow for information before answering question: To determine the probability, the Risk Management
Good day
Please see attached document that contains the table highlighted in yellow for information before answering question:
To determine the probability, the Risk Management team has developed a number of scenarios by using the Delphi-technique. Although the probabilities were determined on a qualitative basis, the CRO and her team were satisfied that the values appear to be reasonable.
Factors that were considered in the scenarios were past experience, the current situation and future trends as discussed with Two Hands Econometrics Consultancy Services. The CRO and her team determined the probability of the expected losses for the period as indicated in the box. The CRO is of the opinion that the Chebyshev theorem is the most appropriate method to calculate the MPY. The k-value as determined by the Risk Department is 1.05.
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