# Question

Suppose the firm issues a single zero-coupon bond with time to maturity 3 years and maturity value $110.

a. Compute the price, yield to maturity, default probability, and expected recovery (E [BT| Default]).

b. Verify that equation (27.5) holds.

a. Compute the price, yield to maturity, default probability, and expected recovery (E [BT| Default]).

b. Verify that equation (27.5) holds.

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