This question has 8 multiple choice questions. For each part, you are given five possible answers, labelled A, B, C, D, and E, only one of which is correct.

There is no penalty for selecting an incorrect answer. A correct answer gets one mark.

For each question, make your choice and then record it in the appropriate box at the end of the question.

Qu.		A	B	C	D	E
13A	Which of these would NOT be used in a stress test for Basel capital adequacy?	A 3-year fall in world GDP of 20%.	A 30% reduction in house values	A rise in the UK unemployment rate from 4.1% to 8.9%	An increase in Eurozone inflation to 7.5%.	Heavy rain to cause 1/3 of Europes land to be under water. .
13B	Which one of these is a possible reason for a bank to be removed from a stress testing review by the central bank?	The bank has been bought by a bank from another country	The bank has moved the location of its Head Office	The bank has stopped granting new credit	The bank is no longer a systemic bank	The bank reported a loss for the most recent financial year
13C	According to the UK government guidelines, the assessment of affordability should be	Account-focussed	Borrower-focussed	Expenditure-focussed	Income-focussed	Lender-focussed
13D	Regularisation is a process which	aims to have equal differences in wofe between attribute groupings	sets the cut-off to maximise profit	splits cases evenly across attribute groupings	spreads Bad cases across attribute groupings	tries to protect models from over-fitting
13E	Hosmer-Lemeshow is used to assess if the	correlations among the characteristics are significant	estimates of PD are accurate	improvement in Gini is statistically significant	rating categories / buckets are appropriate	underlying economy has changed
13F	See below. The total charge for D and E is	10.6	12.2	16.7	17.8	28.4
13G	See below. The Log Odds to Score relationship that we might expect is	Cannot Tell	Line B	Line C	Line D	Line E
13H	Reject Inference is a process where we	ask our applicants which bank rejected their applications before their current application	estimate how rejected applications would have performed if we had accepted them	estimate how the current applicants will perform if we reject them and they are then accepted by another lender	estimate which customers will reject our offer if we accept them but at a higher price	work out which rejected applications would also have been rejected by our competitors

Ref: 13F

There are six aircraft using an airfield. The costs of building the runway lengths associated with each size of aircraft are 12, 20, 30, 30, 39, and 51, for aircraft A, B, C, D, E, and F, respectively. Calculate the Shapley Values which would correspond to a fair distribution of costs among the owners of the six aircrafts and then answer the question above.

Ref: 13G

We built a scorecard using data from a period during which the economy was in a recession. WE are now monitoring the performance of this scorecard during a recent period in which the economy is doing much better. The scorecard continues to offer a high level of separation of Goods and Bads. The graph below shows the Log G:B odds for the development sample (Devt) and four possible relationships for actual performance.

-C PDO Chart 10 8 6 c Log G:B Odds N 0 Score 400 420 440 460 480 500 $20,540 560 580 600 620 640 680 680 700 720 740 760 -2 Devt Actual E -Actual C Actual B Actual D -C PDO Chart 10 8 6 c Log G:B Odds N 0 Score 400 420 440 460 480 500 $20,540 560 580 600 620 640 680 680 700 720 740 760 -2 Devt Actual E -Actual C Actual B Actual D