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Assume the first-, second-, third-, fourth-, and fifth-year hazard rates are 1.5%, 2%, 2.5%, 3%, and 3.5% respectively. Compute the expected loss on a 5-year
Assume the first-, second-, third-, fourth-, and fifth-year hazard rates are 1.5%, 2%, 2.5%, 3%, and 3.5% respectively. Compute the expected loss on a 5-year $100 par value 6% coupon rate payable annually bond. Please use a recovery rate of 40%.
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