Q.1830 Albert Cook, FRM, owns a portfolio of bonds worth $50 million. This portfolio is made up of AA-rated bonds ($30 million) and BB-rated bonds ($20 million). The 1-year probabilities of default for AA-rated and BB-related bonds are 1% and 2.5%, respectively. Determine the 1-year expected credit loss from Cook’s portfolio, given that the recovery rate for AA bonds is 80% while that of BB bonds is 60%.