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(15 points) Credit risk measurement 2.1 Briefly describe the underlying economic reasons of using option model (KMV model) to price the market value of a

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(15 points) Credit risk measurement 2.1 Briefly describe the underlying economic reasons of using option model (KMV model) to price the market value of a firm's asset and calculate expected default probability? (You don't need to go into details of the mathematical formula. Explaining the intuition is sufficient.)

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