What is the cost of unexpected losses

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Question: The expected loss rate for a customer is .40%, the 99% confidence interval VaR is 5 cents per dollar, the bank's cost of funding is 5.5%, and the cost of bank equity capital is 11%. Enter your answers as decimals with four places of precision. What is the cost of expected losses? What is the cost of unexpected losses? What is the loan rate to customers?

Reference no: EM131795536

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