Mathematics · Financial Arithmetic
A bank's retail loan portfolio has the following parameters for the current year: • Total Exposure at Default (EAD): 1,00,00,000 INR • Average Probability of Default (PD): 5% • Average Loss Given Default (LGD): 40% • Operating Profit before Provisions: 5,00,000 INR Calculate the Expected Loss (EL) and determine the Net Profit of the bank after covering the Expected Loss.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1EL = 4,00,000 INR; Net Profit = 1,00,000 INR
- 2EL = 2,50,000 INR; Net Profit = 2,50,000 INR
- 3EL = 2,00,000 INR; Net Profit = 3,00,000 INR✓
- 4EL = 5,00,000 INR; Net Profit = 0 INR
Correct answer
EL = 2,00,000 INR; Net Profit = 3,00,000 INR
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Mathematics?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Financial Arithmetic MCQs →Want more practice questions on Financial Arithmetic?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Mathematics · Financial Arithmetic