1. Use the information in the table to determine the overall risk class for a borrower with the following characteristics (round your answer to the nearest whole number if decimal):

   Equity to asset ratio = .50

   Capital debt repayment capacity = .75

   Return on assets = 3%

   Current ratio = 1.10

   Management = average

   Risk Class	PD	Solvency (E/A)	Liquidity (CR)	Repayment (CDRC)	Earnings (ROA)	Management
   1	0.00
   2	0.00
   3	0.00
   4	0.03	Above 0.89	Above 3.99	Above 1.99	Above 11.99	Top
   5	0.04	0.80-0.89	2.50-3.99	1.60-1.99	10.00-11.99	Very Strong
   6	0.24	0.75-0.79	2.00-2.49	1.50-1.59	8.00-9.99	Strong
   7	0.46	0.70-0.74	1.80-1.99	1.40-1.49	6.00-7.99	Above average
   8	0.67	0.65-0.69	1.60-1.79	1.30-1.39	4.00-5.99	Average
   9	0.90	0.60-0.64	1.40-1.59	1.20-1.29	2.00-3.99	Minor concern
   10	2.16	0.50-0.59	1.20-1.39	1.10-1.19	0.00-1.99	Some weakness
   11	3.20	0.40-0.49	1.00-1.19	1.00-1.09	-2.00 to 0.00	Serious weakness
   12	7.76	0.30-0.39	0.80-0.99	0.90-0.99	-4.00 to -1.99	Serious concern
   13	12.28	0.20-0.29	0.60-0.79	0.80-0.89	-6.00 to -3.99	Very serious
   14	27.17	Below 0.20	Below 0.50	Below 0.80	Below -6.00	No hope
   Borrower Summary Score
   Criteria	Weight
   Solvency (E/A)	30%
   Liquidity (CR)	20%
   Repayment (CDRC)	20%
   Earnings (ROA)	20%
   Management	10%

   	a.	Risk Class 6
   	b.	Risk Class 12
   	c.	Risk Class 9
   	d.	Risk Class 11