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B is a risky bond. The associated discount rate is 4%. The face value is $1000, and the coupon rate is 8%. With a probability

B is a risky bond. The associated discount rate is 4%. The face value is $1000, and the coupon rate is 8%. With a probability p, the bond is repaid in full; otherwise, bondholders get zero. The bond trades at par. What is the value of p?

91.1%

94.0%

96.3%

99.1%

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