Question: What is the difference between the marginal default probability and the cumulative default probability? a. Marginal default probability is the probability that a borrower will

What is the difference between the marginal default probability and the cumulative default probability?

a. Marginal default probability is the probability that a borrower will default in any given year, whereas the cumulative default probability is over a specified multiyear period.

b. Marginal default probability is the probability that a borrower will default due to a particular credit event, whereas the cumulative default probability is for all possible credit events.

c. Marginal default probability is the minimum probability that a borrower will default, whereas the cumulative default probability is the maximum probability.

d. Both

a. and

c. are correct.

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