Suppose that there two bonds A and B that may default and let TA and TB de- note their respective default times. Suppose that TA Exponential( = 0.10) and TB Exponential(B =0.07). Assumethatthediscountrateisequalto0andthat(FA(TA),FB(TB)) is distributed according to Joe's copula C(u,v)=1[(1u)2 +(1v)2 (1u)2(1v)2]1/2 Consider an insurance with a payoff of $2 million if both bonds default before the end of the first year and $1 million if both survive the first year but they default before the end of the second year. Find the fair price of this insurance