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Suppose the estimated linear probability model used by an Ft to predict business loan applicant default probabilities is PD = 0.04X1 +0.04X2 -0.02X3 + error,

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Suppose the estimated linear probability model used by an Ft to predict business loan applicant default probabilities is PD = 0.04X1 +0.04X2 -0.02X3 + error, where X1 is the borrower's debt/equity ratio, X2 is the volatility of borrower earnings, and X3 is the borrower's profit ratio. For a particular loan applicant X1 = 0.70, X2 = 0,35 and X3 = 0.55 (round to four decimal places). A. What is the projected probability of default for the borrower? B. What is the projected probability of repayment

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