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To estimate the interest charges on the loan, an analyst should use one of the...

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To estimate the interest charges on the loan, an analyst should use one of the following four formulas:

A.

Loan interest = Risk-free rate - Probability of default x Loss given default + Spread

B.

Loan interest = Risk-free rate + Probability of default x Loss given default + Spread

C.

Loan interest = Risk-free rate - Probability of default x Loss given default - Spread

D.

Loan interest = Risk-free rate + Probability of default x Loss given default - Spread

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