KU Font IS Voice Sensitivity Editor 2 LIN 3 5 6 6. A company has one- and two-year bonds outstanding, each providing a coupon of 6% per year payable annually. The yields on the bonds (expressed with continuous compounding) are 4.0% and 4.5%, respectively, Risk-free rates are 2.0% for all maturities. The recovery rate is 35% Defaults can take place halfway through each year, Estimate the risk-neutral default rate each year. 3 KU Font IS Voice Sensitivity Editor 2 LIN 3 5 6 6. A company has one- and two-year bonds outstanding, each providing a coupon of 6% per year payable annually. The yields on the bonds (expressed with continuous compounding) are 4.0% and 4.5%, respectively, Risk-free rates are 2.0% for all maturities. The recovery rate is 35% Defaults can take place halfway through each year, Estimate the risk-neutral default rate each year. 3