7 You are looking at a $100,000 one-year, zero-coupon bond whose yield is 2.82%. In the event this (3 points) bond defaults you can expect a recovery rate of 30%. The yield for a similar one-year, zero-coupon risk-free bond is 1.82%. a. Using the formula for probability of default, what is the market's estimate of the probability that this bond will default? 1 + yrisk free PD 1-f y corporate 1 1 b. What is the Loss Given Default (LGD) for this bond? MO C. What is the Expected Credit Loss - E(CL) - for this bond