13. Suppose that the risk-free zero curve isflat at 9% per annum with continuous compounding and that defaults can occur half way through each year in a new three-year credit default swop. Suppose that the recovery rate is 65% and the hazard rate is 6%. Estimate the credit default swap spread (quarterly payments) 4. Manel Inc. is considering launching a new toy just in time for the Christmas season. They estimate that if Mael launches the new toy this year it will have an NPV of $25 million. Company has the option to wait one year until the next Christmas season to launch the toy, however, the demand next year will depend upon what new toys Mattel's competitors introdace and therefore greater uncertainty about next year's demand. Launching the new today will involve a total capital expenditure of $100 million. If the risk-hee rate is 5% NdI ) is 62 and Nd) is 65, then what is the value ofthe option to wait until next year to launch the new toy