Question: Suppose the firm issues a single zero-coupon bond with maturity value $100. a. Compute the yield, probability of default, and expected loss given default for

Suppose the firm issues a single zero-coupon bond with maturity value $100.
a. Compute the yield, probability of default, and expected loss given default for times to maturity of 1, 2, 3, 4, 5, 10, and 20 years.
b. For each time to maturity compute the approximation for the yield:

How accurate is the approximation?

1 = r + x Pr(default) x Expected loss given default

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