Question: Question 4 (10 points) The spread between the yield on a five-year bond issued by a company and the yield on a similar risk-free bond

Question 4 (10 points) The spread between the yield on a

Question 4 (10 points) The spread between the yield on a five-year bond issued by a company and the yield on a similar risk-free bond is 100 basis points (b.p.). If the spread is 95 b.p. for a three-year bond, and the recovery rate is 30%, what is the average hazard rate in years 4 and 5? Question 4 (10 points) The spread between the yield on a five-year bond issued by a company and the yield on a similar risk-free bond is 100 basis points (b.p.). If the spread is 95 b.p. for a three-year bond, and the recovery rate is 30%, what is the average hazard rate in years 4 and 5

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