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D. All of the above.
Answer: C
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Alpha Bank determined that Delta Industrial Machinery Corporation has 2% change of default on a one-year no-payment of USD $1 million, including interest and principal repayment. The bank charges 3% interest rate spread to firms in the machinery industry, and the risk-free interest rate is 6%. Alpha Bank receives both interest and principal payments once at the end the year. Delta can only default at the end of the year. If Delta defaults, the bank expects to lose 50% of its promised payment. Hence, the loss rate in this case will be
A. 1%
B. 10%
C. 5%
D. 3%
Answer: A
NEW QUESTION: 3
What if you teach the child to swim in a pool and the child goes to the beach and can do the front crawl in the ocean?
A. Stimulus generalization
B. Response generalization
C. Failure to generalize
D. Natural contingencies
Answer: B
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