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3. Given a risky corporate bond with a 250 basis point (bps) credit spread over an equivalent default-free (sovereign) bond, if an investor has historical

3. Given a risky corporate bond with a 250 basis point (bps) credit spread over an equivalent default-free (sovereign) bond, if an investor has historical data for applicable default and recovery rates, what components of the credit spread can be estimated? What risk exposures remain in the residual components?

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