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Suppose the estimated linear probability model used by an FI to predict business loan applicant default probabilities is PD=0.03X1+0.02X20.05X3+ error, where X1 is the borrower's

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Suppose the estimated linear probability model used by an FI to predict business loan applicant default probabilities is PD=0.03X1+0.02X20.05X3+ error, where X1 is the borrower's debtlequity ratio, X2 is the volatility of borrower earnings, and X3 is the borrower's profit margin. For a particular loan applicant, X1=0.79,X2=0.25, and X3=0.10. What is the projected probability of default for the borrower? Note: Convert your answer to percentage format. Enter your answer rounded to 2 decimals, and without any units. So, for example, if your answer is 3.4568%, then just enter 3.46. Assume the same information as in the previous question. What is the projected probability of repayment if the debt/equity ratio is 2.85? Note: Convert your answer to percentage format. Enter your answer rounded to 2 decimals, and without any un So, for example, if your answer is 3.4568%, then just enter 3.46

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