Question $1[10]$ a$.$ Explain the two most important drivers of credit risk and how those relate to the probability of default $($PD$).(5)$ b$.$ As head of credit risk at Daspoort Investment Bank, you are considering approval of a five$-$year credit asset $($business term loan$)$ with a bullet $($balloon$)$ repayment at the end of a term. The term loan shows a marginal probability of default of $1\mathrm{.}3\%,1\mathrm{.}5\%,1\mathrm{.}2\%,1\mathrm{.}7\%,$ and $2\mathrm{.}2\%$ for each of the five years, respectively. How would you find the cumulative probability of default over the five$-$year period for pricing purposes? $(5)$