The ABC Banking Corp provides loans to corporations of every size. They are review a loan application
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Question:
The ABC Banking Corp provides loans to corporations of every size. They are review a loan application for the ACME Products Corporation. ACME wants to borrow $10 million. The risk management department informs the line manager that they expect the probability of default to be 1.25% and the loss given default to be 37.5%.
What is the expected credit loss on the loan?
A) $3,750,000
B) $46,875
C) $125,000
D) Not Enough Information
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