Suppose that the risk-free zero curve is flat at 6% per annum with continuous compounding and that defaults can occur at time's 1 year, 2 years, 3 years, and 4 years in a four-year plain vanilla credit default swap with semiannual payments. Suppose that the recovery rate is 20% and the probabilities of default at times 1 year, 2 years, 3 years and 4 years are 0.01, 0.015, 0.2 , and 0.25, respectively. The reference obligation is a bond paying a coupon semiannually of 8% per year.

Defaults always take place immediately before coupon-payment dates on this bond. What is the credit default swap spread? What would the credit default spread be if the the instrument were a binary credit default swap?