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In the context of credit risk management, consider an investment firm that might default. Assess the potential loss for a financial institution under two scenarios: one where netting of exposures is applied and another where netting is not utilized. How much would the financial institution lose in each scenario?
A
Loss of USD 20 million if netting is used; loss of USD 24 million if netting is not used
B
Loss of USD 20 million if netting is used; loss of USD 44 million if netting is not used
C
Loss of USD 24 million if netting is used; loss of USD 32 million if netting is not used
D
Loss of USD 20 million if netting is used; loss of USD 24 million if netting is not used