Question: A borrower with a 2-year loan has a marginal probability of default in year 1 of 3% and a marginal probability of default in year

A borrower with a 2-year loan has a marginal probability of default in year 1 of 3% and a marginal probability of default in year 2 of 2%. What is the cumulative probability that this borrower will default by the end of year 2?

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