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Calculate the risk of default of a year corporate bond

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Reference no: EM132611600

Question 1. Calculate the risk of default (1-ρ) of a 1year corporate bond with a yield of 8% and an equivalent T- bond yielding 5% per annum

Question 2. Calculate the cumulative, probability of default (Cd) on a two-year corporate bond if the marginal probability of default in year two is the same as the marginal probability of default in year one (as calculated in part one above

Reference no: EM132611600

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