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A zero-coupon bond has a beta of 0.3 and promises to pay $1000 next year with a probability of 95%. If the bond defaults, it
A zero-coupon bond has a beta of 0.3 and promises to pay $1000 next year with a probability of 95%. If the bond defaults, it will pay nothing. One-year Treasury securities are yielding 2%, and the equity premium is 5% What is the promised rate of return on this bond? Round your answer to the nearest tenth of a percent. 8.09 82 6.99 8.99 Previous At e 72 6 E K B ALT
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Applied Quantitative Finance
Authors: W.; T. Kleinkow; G. Stahl Hardle
1st Edition
3540434607, 978-3540434603
