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Assume that for a particular one-year bond, the probability of default is 8%, the face value is $1000, the recovery rate is 65% and the
Assume that for a particular one-year bond, the probability of default is 8%, the face value is $1000, the recovery rate is 65% and the risk free rate is 3%. All rates are stated as decimals. What is the price of the bond?
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