Expected Loss in Python | Dataford Interview Questions

Tiger Analytics uses credit risk analytics to estimate potential portfolio losses. For each credit account, calculate its expected loss and return the total expected loss for the portfolio.

For an account, expected loss is defined as:

exposure * probability_of_default * loss_given_default

Implement expected_loss(portfolio), where portfolio is a list of dictionaries. Each dictionary contains:

exposure: Non-negative numeric outstanding exposure
probability_of_default: A probability between 0 and 1
loss_given_default: A proportion between 0 and 1

Return the sum of expected losses as a floating-point number. Do not round the result.

Constraints

0 <= len(portfolio) <= 10^5
0 <= exposure <= 10^9
0 <= probability_of_default <= 1
0 <= loss_given_default <= 1
Every account contains the keys exposure, probability_of_default, and loss_given_default

Function Signature

def expected_loss(portfolio):

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