The Probability That a Borrower Would Default in Any Specific

question 58

True/False

The probability that a borrower would default in any specific time period is the marginal default probability.

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Definitions:

MBCA

Stands for the Model Business Corporation Act, a template for state statute that provides a standard for corporate law.

Closely Held Corporations

Corporations that have a small number of shareholders and whose shares are not publicly traded.

Business Judgment Rule

A legal principle that shields corporate directors, under certain conditions, from liability for decisions that harm the company if the decisions were made in good faith and with due diligence.

Fiduciaries

Individuals or entities that hold a legal or ethical relationship of trust with one or more parties, often in financial matters.