Question: Use the information in the table to find the expected loss amount for a borrower in risk class 11, assuming that loss-given-default is in class

Use the information in the table to find the expected loss amount for a borrower in risk class 11, assuming that loss-given-default is in class 4. The loan amount is $250.000. Risk Class PD LGD Class 1 (0%) 0.00 LGD Class 4 (75%) 0.00 0.00 0.00 1 2 3 4 0.02 5 0.03 6 Expected Loss Rate LGD LGD Class 2 Class 3 (25%) (50%) 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.02 0.01 0.02 0.06 0.12 0.12 0.23 0.17 0.34 0.22 0.45 0.54 1.08 0.80 1.60 1.94 3.88 3.07 6.14 6.79 13.58 0.00 0.00 0.00 0.03 0.04 0.24 0.46 0.67 0.90 2.16 3.20 7.76 12.28 27.17 7 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 LGD Class 5 (100%) 0.00 0.00 0.00 0.03 0.04 0.24 0.46 0.67 0.90 2.16 3.20 7.76 12.28 27.17 8 9 0.18 0.37 0.50 0.67 1.62 2.40 5.82 9.21 20.38 10 11 12 13 14 O a. 2.4% O b.3.2% O c. $8,000 O d. $6.000
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