Assume that a companys hazard rate is a constant 8% per year, or 2% per quarter. An
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Assume that a company’s hazard rate is a constant 8% per year, or 2% per quarter. An investor sells five-year CDS protection on the company with the premiums paid quarterly over the next five years.
What is the probability of survival through the second quarter?
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The probability of survival through the second quarter is 9604 The probabil...View the full answer
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