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7. What is the fundamental value of this corporate bond? N = 3, I/Y = 1.25%, PMT = $55, FV = $1,000 Probability of default

7. What is the fundamental value of this corporate bond? N = 3, I/Y = 1.25%, PMT = $55, FV = $1,000 Probability of default on each cash flow is 2.5% You get $0 PMT if default occurs Use expected value and risk free rate (1.25%) to solve

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