Question: One disadvantage of using the Expected Default Frequency model (EDF) to model credit risk is that: a. It links the equity and credit markets. b.

One disadvantage of using the Expected Default Frequency model (EDF) to model credit risk is that:

a.

It links the equity and credit markets.

b.

Book values of liabilities are not updated as frequently as other inputs..

c.

It is based upon option pricing models.

d.

It can be updated frequently.

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