Question: In an April 21 2011 article in Bloomberg com by Abigail

In an April 21, 2011 article in by Abigail Moses entitled, “Greece, Portugal Sovereign Credit-Default Swaps Jump to Records,”(, the following statement appears:
“Credit-default swaps on Greece jumped 40 basis points to 1,340 basis points according to CMA, signaling a 68 percent chance of default within five years.”
(a) How is the “68 percent chance of default” obtained?
(b) What assumptions must be made to use this estimate of default?

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