Enter the default point ($), the market value of assets ($), and the asset volatility (%) into the EDF Calculator. The calculator will evaluate the EDF.

## EDF Formula

The following formula is used to calculate the EDF.

EDF = DP / MVA * AV

Variables:

• EDF is the EDF (%)
• DP is the default point ($) • MVA is the market value of assets ($)
• AV is the asset volatility (%)

To calculate the expected default frequency, divide the default points by the market value of the assets, then multiply by the asset volatility.

## How to Calculate EDF?

The following steps outline how to calculate the EDF.

1. First, determine the default point ($). 2. Next, determine the market value of assets ($).
3. Next, determine the asset volatility (%).
4. Next, gather the formula from above = EDF = DP / MVA * AV.
5. Finally, calculate the EDF.
6. After inserting the variables and calculating the result, check your answer with the calculator above.

Example Problem:

Use the following variables as an example problem to test your knowledge.

default point ($) = 50,000,000 market value of assets ($) = 70,000,000

asset volatility (%) = .75

EDF = DP / MVA * AV =  ?