Information | Lesson 1: Credit Risk | TW3421x Courseware | edX

DelftX: TW3421x Credit Risk Management

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Course
Info

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cluis

Discussion

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Acronyms

An Introduction to
R

Welcome
Week 1:Introduction
Introduction

During the entire course, after each video lesson, you will have questions to
answer.

Help

Lesson 1: Credit
Risk
Lesson 2: Basel II

These questions are meant to help you in understanding and reviewing some of
the most important concepts of each lesson.
This type of questions is not graded, and you can try to answer as many times
as you want.

Lesson 3: Basel III

If you want, you can also look at the solution immediately, but I definitely
suggest not to do so. Just try to answer according to what you have just learnt!

Summary

Another way of helping you, I hope.

The Sofa

Weekly Discussion

MULTIPLE
CHOICE

Consider Credit Risk (CR) and Default Risk (DF). Then

DF contains
CR
DF and CR are the same
thing
CR does not contain
DF
CR contains DF

EXPLANATION

Default risk is one of the two components of credit risk, hence CR contains
DF.

https://courses.edx.org/courses/DelftX/TW3421x/1T2014/courseware/1a7163fbf5ac4edd93c17955458bc54b/6686dcf832b54806a7bbfb80bfb6e35d/[4/15/2014 6:17:00 PM]

Information | Lesson 1: Credit Risk | TW3421x Courseware | edX

Check

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CHECKBOXES

Select the right definition of Credit Risk

Credit risk is the risk that the value of a portfolio changes due to
unexpected changes in the credit quality of issuers or trading partners.
This subsumes losses due to defaults, but not losses caused by changes
in credit quality of a counterparty in an internal or external rating system.
Credit risk is the risk that the value of a portfolio changes due to

unexpected changes in the credit quality of issuers or trading partners.

This subsumes both losses due to defaults, and losses caused by changes
in credit quality of a counterparty in an internal or external rating system.
Credit risk is the risk that the value of a portfolio changes due to
unexpected changes in the number of issuers or trading partners. This
subsumes both losses due to defaults, and losses caused by changes in
credit quality of a counterparty in an internal or external rating system.
None of the previous
definitions.

EXPLANATION

Clearly the second answer. Just check the video again, if you are not sure.

Check

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CHECKBOXES

Consider the following examples and select those that can be categorized as
credit risk
A loss due to
fraud

A loss due to the default of a counterparty

A bond downgraded from class AA to class A

A loss due to a price

https://courses.edx.org/courses/DelftX/TW3421x/1T2014/courseware/1a7163fbf5ac4edd93c17955458bc54b/6686dcf832b54806a7bbfb80bfb6e35d/[4/15/2014 6:17:00 PM]

Information | Lesson 1: Credit Risk | TW3421x Courseware | edX

decrease
A loss due to wrong investment
choices

EXPLANATION

Point 2 is an example of Default Risk.

Point 3 is an example of Credit Deterioration.

Check

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