Question: = Consider a 10-year zero coupon bond with a face value F = 100 000. The risk free rate is 0.01. The credit spread for

= Consider a 10-year zero coupon bond with a face value

= Consider a 10-year zero coupon bond with a face value F = 100 000. The risk free rate is 0.01. The credit spread for the bond is 150 basis points. Compute the following at t = 0: The default probability of the bond. The value of the bond if there is no recovery on a default. The value of the bond if there is a recovery of 15%. The value of the bond if there were no possibility of default. = Consider a 10-year zero coupon bond with a face value F = 100 000. The risk free rate is 0.01. The credit spread for the bond is 150 basis points. Compute the following at t = 0: The default probability of the bond. The value of the bond if there is no recovery on a default. The value of the bond if there is a recovery of 15%. The value of the bond if there were no possibility of default

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