Question: You estimate that a 1-year zero-coupon bond (face value = $1000) has a probability of default equal to 30%. In the event of default, you

You estimate that a 1-year zero-coupon bond (face value = $1000)

You estimate that a 1-year zero-coupon bond (face value = $1000) has a probability of default equal to 30%. In the event of default, you estimate the bond issuer will pay $549. The current risk-free rate is 2%. How much should you pay for this bond

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