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1. What is the probability of a loan Upgrade and Downgrade? 2.What is the present value of the loan at the end of the one-year

1. What is the probability of a loan Upgrade and Downgrade? 2.What is the present value of the loan at the end of the one-year risk horizon for the case where the borrower has been upgraded from Baa to A? 3. What is the mean value of the loan at the end of year 1? 4. What is the volatility of the loan value at the end of year 1?

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