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K.R.D. Bank has a cost of funds of 9 percent. The borrower has a 7.1 percent chance of default, and if default occurs, the bank
K.R.D. Bank has a cost of funds of 9 percent. The borrower has a 7.1 percent chance of default, and if default occurs, the bank expects to recover 87 percent of the principal and interest. What is the standard deviation of the default rate using the Moody's Analytics model, assuming defaults are binomially distributed? (Please enter your answer in percentage with 2 digits after the decimal point!)
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