Question: In our risk rating model example, we looked at a scenario that improved Atlas risk rating from Moderate Risk to Low Risk. As a result,

In our risk rating model example, we looked at a scenario that improved Atlas risk rating from Moderate Risk to Low Risk. As a result, the RAROC for each of its loan facilities increased significantly.

Which of the following changes to the inputs in the RAROC calculation, in response to the improved risk rating, did NOT contribute to this increase in the RAROC?

A decrease in default probability

A decrease in loss given default

A decrease in capital requirement

A decrease in capital ratio

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