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Assume that the risk free rate is equal to 0.02. The corporate bond rate for a risky bond is 0.10. Assume a recovery rate of

Assume that the risk free rate is equal to 0.02. The corporate bond rate for a risky bond is 0.10. Assume a recovery rate of 0.45. All rates in this problem are stated as decimals. Using the estimated calculation formula, calculate , the probability of default. Round your answer to three decimal places, and state as a decimal.

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