A one-year zero-coupon bond with a 19% probability of defaulting currently has a market price of $72.
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A one-year zero-coupon bond with a 19% probability of defaulting currently has a market price of $72. The risk-free rate is 5%.What risk premium are investors demanding to accept the credit risk of this bond? Assume 100% LGD.
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The discount rate used by investors R must satisfy the f...View the full answer
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Related Book For 
Quantitative Financial Risk Management
ISBN: 9781119522201,9781119522263
1st Edition
Authors: Michael B. Miller
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