The government of Ethniclashistan has issued 10 year sovereign bonds with face value of $100,000, 5%...

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The government of Ethniclashistan has issued 10 year sovereign bonds with face value of $100,000, 5% coupon paid annually, at a price of $ 74,329.37 Meanwhile, US Treasury bonds with the exact same specifications (same face value, maturity and coupon structure) are selling in the market for $ 100,000. Based on this information, what is the probability that Ethniclashistan bonds default sometime within the next 10 years? The government of Ethniclashistan has issued 10 year sovereign bonds with face value of $100,000, 5% coupon paid annually, at a price of $ 74,329.37 Meanwhile, US Treasury bonds with the exact same specifications (same face value, maturity and coupon structure) are selling in the market for $ 100,000. Based on this information, what is the probability that Ethniclashistan bonds default sometime within the next 10 years?

Answer rating: 100% (QA)

The probability of default is not explicitly provided in the information given To estimate the proba... View the full answer