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A bond quotes a rate of return of 5% and will pay $1,000 in one year with a probability of 42% and $0 with a

A bond quotes a rate of return of 5% and will pay $1,000 in one year with a probability of 42% and $0 with a probability of 58%.

part A)What is the time premium?

part B)What is the default premium?

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