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Choose any 10 stocks and do the following: Use their 1-year and 2-year CDS quotes to compute their 1-year and 2-year default probabilities (assuming 0.4

Choose any 10 stocks and do the following:

  1. Use their 1-year and 2-year CDS quotes to compute their 1-year and 2-year default probabilities (assuming 0.4 recovery rate)
  2. Use the KMV model (K = STD + LTD) to compute their 1-year default probability [please also report the expected recovery value]
  3. Use the Geske model (K1 = STD and K2 = LTD) to compute their 1-year and 2-year default probabilities [please also report the expected recovery value]

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