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1. Why is there a greater-than sign in the loan approval decision RAROC > benchmark return on capital?

2. What are the risks that Australian Economy is exposed to if RBA undertake quantitative tightening? (Considering the exchange rate determinants).

3. The national asset allocation is X1 = 30%, X2 = 20%, X3 = 40%, X4 = 10%. A financial institution has an equal amount invested in the assets. Calculate the loan concentration.

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