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Suppose that debt-equity ratio (D/F) and the sales-asset ratio (S/A) were two factors influencing the past default behavior of borrowers. Based on past default (repayment)

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Suppose that debt-equity ratio (D/F) and the sales-asset ratio (S/A) were two factors influencing the past default behavior of borrowers. Based on past default (repayment) experience, the linear probability model is estimated as: PD_i = 0.5(D/E_i) + 0.1 (S/A_i). If a prospective borrower has a debt-equity ratio of 0.4 and sales-asset ratio of 1.8, what is the expected probability of default

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