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AA-rated bonds have a lifetime default rate of 3.6%. Assume that AA-rated bonds have an average time to maturity of 7.5 years. Compute the probability
AA-rated bonds have a lifetime default rate of 3.6%. Assume that AA-rated bonds have an average time to maturity of 7.5 years. Compute the probability that the firm defaults on the fourth coupon payment. Keep your answer in 6 decimal places,
use this equation to solve:
P=(1+r)1C+(1+r)2C++(1+r)nTC+F
AA-rated bonds have a lifetime default rate of 3.6%. Assume that AA-rated bonds have an average time to maturity of 7.5 years. Compute the probability that the firm defaults on the fourth coupon payment. Keep your answer in 6 decimal places,
use this equation to solve:
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