In the Context of the KMV Credit Monitor Model, the Market

Multiple Choice

In the context of the KMV Credit Monitor Model, the market value of a risky loan made by a lender to a borrower can be expressed as:

A) F(r) = Be^-i/r[(1/d) N(h₁) + N(h₂) ]
B) F(r) = Be^-ir[(1/d) N(h₁) + N(h₂) ]
C) F(r) = Be^-ir[(1/d) - N(h₁) + N(h₂) ]
D) F(r) = Be^-ir[(1/d) N(h₁) $\times$ N(h₂) ]