economic capital

[Lenka2019]

1.31 Could you please explain the purpose of economic capital, why isn't is to absorb unexpected loss and tail loss?

 

[Nicole Seaman]

1.31 Could you please explain the purpose of economic capital, why isn't is to absorb unexpected loss and tail loss?

Hello @Lenka2019

Can you please let us know if you are referring to a specific source (you've placed 1.31 at the beginning)? If this is a practice question from that source, please include the full question and answer. We really need you to be more specific when asking questions, especially if you are referring to a specific source. It is much easier for people to answer questions if they have the full source that you are referring to. Thank you.

Updated to note that I've sent a private message to you because you have posted numerous new threads like this in the forum.