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Consider a $100,000 loan balance (EAD) Suppose a Borrower is in class 5 with a Probability of Default (PD) of 0.04 % and a loan

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Consider a $100,000 loan balance (EAD) Suppose a Borrower is in class 5 with a Probability of Default (PD) of 0.04 % and a loan with loan characteristics (LGD) of 50%. Given the credit risk scoring matrix presented in class, what is the expected loss rate and amount for this loan [dollar amount)

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