QUESTION 20 The following table shows the probability of default ( ) for companies starting with a particular credit rating Time (years)12345710Aaa0 0000 0130 0130 0370 1040 2410 489Aa0 0220 0680 1360 2600 4100 6821 017A0 0620 1990 4340 6790 9581 6152 759Baa0 1740 5040 9061 3731 8622 8724 623Ba1 11...

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QUESTION 20 The following table shows the probability of default (%) for companies starting with a particular

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QUESTION 20

The following table shows the probability of default (%) for companies starting with a particular credit rating.
Time (years)12345710Aaa0.0000.0130.0130.0370.1040.2410.489Aa0.0220.0680.1360.2600.4100.6821.017A0.0620.1990.4340.6790.9581.6152.759Baa0.1740.5040.9061.3731.8622.8724.623Ba1.1103.0715.3717.83910.06513.91119.323B3.9049.27414.72319.50923.86931.77440.560Caa15.89427.00335.80042.79648.82856.87866.212
What is the probability of a bond initially rated Ba defaulting during the fifth year?
8.955%
10.065%
2.226%
4.694%

Posted Date: May 19, 2024 02:03 PM

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QUESTION 20 The following table shows the probability of default (%) for companies starting with a particular

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