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Consider the following information regarding corporate bonds: E Rating AA BBB B CCC Average Default Rate .96 .96 0. 496 2.196 5.296 9.996 Recessnon Default

Consider the following information regarding corporate bonds:

E Rating AA BBB B CCC Average Default Rate .96 .96 0. 496 2.196 5.296 9.996 Recessnon Default Rate .96 3. 096 0.96 16.096 43.096 Average Beta 5 1. 0 .17 0.26 0.31 91> B? _0 ON 7 00 be 7 oo 32 w P o 5 .0 o 5 O b l' 0. l

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