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As Head of Relationship Banking at the Royal Manikaland Bank, you are negotiating pricing with Harare Greater Metro, which insists on an interest rate of

As Head of Relationship Banking at the Royal Manikaland Bank, you are negotiating

pricing with Harare Greater Metro, which insists on an interest rate of

12 %

on the

proposed short

-

term credit facility. What would the implied PD at this rate be if the oneyear treasury bill rate is

8 % ?

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