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Gamma Bank provides a $100,000 loan to Big Bath retail stores at 5% interest rate (paid annually). The loan is collateralized with $55,000. The loan also has an annual expected default rate of 2%, and loss given default at 50%. In this case, what will the bank's expected loss be?

To improve the culture and awareness of the operational risk, Gamma Bank's CROdecides to promote three activities within her organization. Which one of the following fouractivities is NOT typically used to develop an operational risk framework?

DeltaFin wants to develop a control scoring method for its RCSA program. Which of thefollowing statements regarding scoring methods are correct?I. DeltaFin can develop a control scoring method that assesses both the design and theperformance of the control.II. DeltaFin can combine the design and performance scores for each control to produce anoverall control effectiveness score.III. DeltaFin can use the control performance scores to compute an overall risk severityscore.IV. DeltaFin can determine its own appropriate control scoring method.

Which of the following statements about endogenous and external types of liquidity areaccurate?I. Endogenous liquidity is the liquidity inherent in the bank's assets themselves.II. External liquidity is the liquidity provided by the bank's liquidity structure to fund itsassets and maturing liabilities.III. External liquidity is the non-contractual and contingent capital supplied by investors tosupport the bank in times of liquidity stress.IV. Endogenous liquidity is the same as funding liquidity.