Question
Suppose the estimated linear probability model is PD = 0.2X1 + 0.25X2 0.43X3 + where X1 = 2.0 is the borrowers debt/equity ratio, X2 =
Suppose the estimated linear probability model is PD = 0.2X1 + 0.25X2 0.43X3 + where X1 = 2.0 is the borrowers debt/equity ratio, X2 = 0.33 is the volatility of borrower earnings, and X3 = 0.20 is the borrowers profit ratio. What is the projected probability of default for the borrower?
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Public Finance In Theory And Practice
Authors: Richard Abel Musgrave, Peggy B. Muscrave
5th Edition
0070441278, 978-0070441279
