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Answer: A

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NEW QUESTION: 3

A. Option B
B. Option E
C. Option D
D. Option A
E. Option C
Answer: A

NEW QUESTION: 4
When pricing credit risk for an exposure, which of the following is a better measure than the others:
A. Expected Exposure (EE)
B. Notional amount
C. Potential Future Exposure (PFE)
D. Mark-to-market
Answer: A
Explanation:
Explanation
Exposure for derivative instruments can vary significantly over the lifetime of the instrument, depending upon how the market moves. The potential future exposure represents the extremes, not the most likely outcome.
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