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Assume that the risk-free rate is 6% per annum with continuous compounding for all maturities, and defaults occur (if they do) only half-way through each

Assume that the risk-free rate is 6% per annum with continuous compounding for all maturities, and defaults occur (if they do) only half-way through each year in a new five-year credit default swap. Suppose that the recovery rate is 30% and the hazard rate is 4%.

If the observed CDS spread in the market is 275 basis points, what is the markets estimate of the hazard rate?

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