You Answered You estimate that a 1-year zero-coupon bond (face value $1000) has a probability of...
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You Answered You estimate that a 1-year zero-coupon bond (face value $1000) has a probability of default equal to 19%. In the event of default, you estimate the bond issuer will bay $582. The current risk-free rate is 3%. How much should you pay for this bond? 870.98 Correct Answer 893.77 margin of error +/- 2 You Answered You estimate that a 1-year zero-coupon bond (face value $1000) has a probability of default equal to 19%. In the event of default, you estimate the bond issuer will bay $582. The current risk-free rate is 3%. How much should you pay for this bond? 870.98 Correct Answer 893.77 margin of error +/- 2
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