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Consider an A-rated bond and a BBB-rated.4 bond. Assume that the one-year probability of default for the A-rated and BBB-rated bonds are 4% and 8%,

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Consider an A-rated bond and a BBB-rated.4 bond. Assume that the one-year probability of default for the A-rated and BBB-rated bonds are 4% and 8%, respectively, and that the joint probability of default of the two bonds is 0.25%. What is the default correlation between the two bonds?(final answer)

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