3. (20 pts) Credit risk measures using the reduced form model: assume a company has the following values for its debt issue. Face value of the firms debt: K = $1,000 Time to maturity of the debt (tenor): T t = 1 year (T = maturity) Default intensity (approx prob of default per year): = 0.04 Loss given default: = 0.3 (30%) P(t,T) = 0.95 (a) Calculate the probability that the debt will default over the time to maturity. (b) Calculate the expected loss. (c) Calculate the present value of the expected loss.