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Understand this now! Apologies for the trouble!

In this example, can someone help me understand how the extra 9% return to the investor is sourced from? Ideally, investor should receive return in proportion to her investment 150bps*(15/105) = 0.214%, but is receiving .214% * 7 (105/15) = 1.5% due to the benefit of leverage making the total...

Hello David, I was going through Basel III finalisation and have found that the standard approach does not employ exposure at all in the calculation of CVA. 1. Does this mean SA-CVA will be will be in the form of spread which must be reduced from the price of a derivative? 2. Will be grateful...

Thank you so much for the clarity, David!!

Hello David! I have noticed that formula for both expected loss and CVA is the same. CVA is the present value of future exposure. Isn't expected loss the same thing? I am aware that EL is used for both credit risk and counterparty credit risk. So, why CVA if we can measure CCR with EL? Would be...