Suppose there were two factors influencing the past default behavior of borrowers: the leverage or debt-assets ratio (D/A) and the profit margin ratio (PM). Based on past default (repayment) experience, the linear probability model is estimated as: PDi=0.105(D/A)i0.35(PM)i Prospective borrower A has a D/A=0.65 and a PM=5%, and prospective borrower B has a D/A= 0.45 and PM=1% Calculate the prospective borrowers' expected probabilities of default (PDi). PD(A)=5.075%;PD(B)=4.375%PD(A)=4.375%;PD(B)=4.375%PD(A)=4.375%;PD(B)=5.075%PD(A)=5.075%;PD(B)=5.075% Assume the same information as in the previous question. From a lender's perspective, which borrower is the better loan candidate? Explain your answer. Prospective borrower A is the letter loan candidate due to the higher expected probability of default and and higher leverage. Prospective borrower B is the letter loan candidate due to the lower expected probability of default and lower leverage. Prospective borrower A is the letter idan candidate due to the lower expected probability of default and and higher leverage. Prospective borrower B is the letter loan candidate due to the higher expected probability of default and lower leverage