Question: Which bonds have the higher default probability? Explain your answers. a. A subordinated bond in GE vs. a senior bond in GE? b. A B-rated

Which bonds have the higher default probability? Explain your answers.

a. A subordinated bond in GE vs. a senior bond in GE?

b. A B-rated 10-year bond in Almost Gone Corp. vs. a BB-rated 10-year bond in Junk Inc.

c. A 10-year senior bond in Antivirus Co. vs. a 20-year senior bond in Antivirus Co.?

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