Enterprise Risk Management Slides

Economic capital / Other risks [15]

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Bullet points include: Might use the following definitions: If hurdle rate is alpha then RAROC will exceed hurdle rate if and only if the net earnings on the loan (the terms in the numerator) exceeds alpha x K (including a suitable time component) C.f. NPV vs. IRR style calculations and corporate finance more generally

Bullet points include: Might use the following definitions: If hurdle rate is alpha then RAROC will exceed hurdle rate if and only if the net earnings on the loan (the terms in the numerator) exceeds alpha x K (including a suitable time component) C.f. NPV vs. IRR style calculations and corporate finance more generally

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