0 Document1 - Word Insert Design Layout References Mailings Sign in Review - ViewHelp I Tell me what you want to do Calibri (Body - 12 - A A Aa - A, E.E.E 21 S inter BI U - abe X, X ?????cDc AaBbccDe AaBbc AaBbccc ??? ??????? ?????cDa ???????? A - 9 - AE EEE E- - - T Normal 1 No Spac. Heading 1 Heading 2 Title Subtitle Subtle Em.. Emphasis - Paragraph Styles - 3. Suppose that an FI holds two loans with the following characteristics. Annual P Fir e Re Se Edit Spread Between Loss to FI Expected Loan Loan Rate and Fl=s Xi Cost of Funds 0.55 5.25% Annual Fees 1.85% Given Default 12% Default Frequency 1.5% 2 0.45 0.45 2.75% 0.65% 15% 0.75% Calculate the return and risk on the two-asset portfolio using KMV Portfolio Manager. Assume the correlation coefficient between the two loans is -0.25 0 0 a 0 A - here to search 0 9 0 W] Pa XD 11:46 AM 3/30/2018