Use the information in the table to determine the probability of default for a borrower with the following characteristics: 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. 0.24% b. 3.20% c. 0.90% d. 7.76%