Question: You estimate that a 1 ayear zero - coupon bond ( face value = 1 0 0 0 ) has a propbality of default equal

You estimate that a 1ayear zero-coupon bond (face value =1000) has a propbality of default equal to 22%. In the even of default, you estimate the bond issuer will pay $596. The current risk-free rate is 4%. How much shojld you pay for this bond?

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