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So if they are specifically adjusting the counter party's credit risk, then does that not mean they adjust the counter party's DVA? I think we agree in principal, just a matter of how we interpreted the question..wish GARP was a bit more clear on this one.

If its about the counter party's default risk, and their default risk goes up - wouldnt that imply an increase in the counterparty's DVA?

Yes, I agree with most people here that it is a CVA from the point of view of the firm. However, for some reason, I recall the question being about how does the firm adjust the counterparty's position in their models. And in that case, since the CP has a higher default probability, that would...

Does anyone recall the question about a firm worrying about traders exposures with counterparties. The answer options were to adjust CVA, adjust DVA, adjust FVA and one more. I was discussing this question earlier; and I got that we should adjust the counterparty's DVA (which would be the...

I chose the option where senior and mezzaning got fully paid, but OC got nothing, with remaining going to equity. My reasoning was that if OC had not yet been used, there would be no need to replenish it (assuming it was already at 1.8 before the cash.) i could be wrong though

Anyone recall the question about the 10,000 usd inflow and outflow? I calculated marginal vars and got that we should add 10,000 of CAD, and remove 10,000 of JPY. Anyone else get the same? Also the question about diversified and undiversified Var.. I think i had about 300-400k on this one...