5. The following information on the mortality rate of loans as estimated by an FI: Years after Issuance Rating 1 2 A-rated loans (yearly) 0.5% 0.5% (cumulative) 0.5% x B-rated loans (yearly) 1.0% 1.25% (cumulative) 1.0% x a. What is the cumulative mortality rate of the A-rated and B-rated loans for year 2? b. If the cumulative mortality rate in year 3 is 3.46 percent for the B-rated loan, what is its yearly mortality rate in year 3? Show work and briefly discuss your results

5. The following information on the mortality rate of loans as estimated by an FI. Years after Issua Rating A-rated loans (yearly) (cumulative) (yearly) (cumulative) 0.5% 0.5% 1.0% 1.0% 0.5% B-rated loans 1 .25% a. What is the cumulative mortality rate of the A-rated and B-rated loans for year 2? b. If the cumulative mortality rate in year 3 is 3.46 percent for the B-rated loan, what is its yearly mortality rate in year 3? Show work and briefly discuss your results