Question: Calculate the equilibrium CDS spread given the following parameters. Conditional year 1 default probability: 2% Conditional year 2 default probability: 4% Recovery rate given default:

Calculate the equilibrium CDS spread given the following parameters. Conditional year 1 default probability: 2% Conditional year 2 default probability: 4% Recovery rate given default: 1%

Riskfree rate: 3% Report your answer in percentage form.

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