FYI it has been described on slide 42 that 'p' is the Probability of Repayment and '1-p' is the Prob of Default. Coming to Slide 46 the numerical says PD =.9725 from previous which should actually be Prob of Repayment. The Calculation is correct. Since I haven't purchased Saunders yet and was trying to seek clarification that in the formula we are feeding in the value of Prob of repayment rather than PD. I understand that this has been dropped out of the curriculum, hence need not worry. Thanks Neha

Hi Neha, You are correct, I have a typo on slide 46. p = 97.25 refers, as you say, to probability of repayment. Saunders always means "probability of repayment" by 'p' such that 1-p = PD, in his reading. (although I wish he wouldn't use p this way, i still think it is confusing. But my error, still). (and you are right, this technically has dropped out of 2008 AIMS, but still worth looking at) David