Financial Risk Manager Part 1
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A research analyst at a boutique investment firm is assessing the impact of an increase in short-term interest rates on the credit rating of bank MSC. The analyst identifies all possible outcomes for the scenario and notes that the rating of bank MSC can either be maintained at the same level (M), be upgraded (U), or be downgraded (D). Which of the following correctly describes the event space?
A
The event space consists of four events.
B
The event space can be represented by the following set: {M, U, D, {M,U}, {M,D}, {U,D}, {M,U,D}, ∅}, where ∅ is the empty set.
C
The event space in this scenario is a continuous probability space.
D
The event space is identical to the sample space of the scenario.