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What is the expected payment from the bond

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Problem 1: A corporate bond has one-year maturity. The bond pays one annual interest payment of 400 and principal of 2000 at the time of maturity. If the bond has a 25% probability of default and payment under default is 200, what is the expected payment from the bond (i.e., what is the expected future value taking into account possible default?)?

Reference no: EM132790309

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