I need a clear explanation

Questions 19 and 20 are based on the following scenario: ABC PLC is entering a four-year single name credit default swap with credit performance of DEF PLC as its underlying. The annual probability of default for DEF PLC is assessed at 2.24% and the recovery rate is estimated at 40%. Question 19: Assuming all defaults occur mid-year and the annual cost of finance for ABC PLC is 6.72%, calculate the equilibrium swap rate for the credit default swap. a) 94bps b) 142bps c) 140bps d) 91bps e) 136bps Question 20: If the swap rate for the credit default swap is 167bps, calculate the implied annual probability of default for DEF PLC. a) 2.62% b) 2.66% c) 2.56% d) 1.60% e) 3.96% Questions 19 and 20 are based on the following scenario: ABC PLC is entering a four-year single name credit default swap with credit performance of DEF PLC as its underlying. The annual probability of default for DEF PLC is assessed at 2.24% and the recovery rate is estimated at 40%. Question 19: Assuming all defaults occur mid-year and the annual cost of finance for ABC PLC is 6.72%, calculate the equilibrium swap rate for the credit default swap. a) 94bps b) 142bps c) 140bps d) 91bps e) 136bps Question 20: If the swap rate for the credit default swap is 167bps, calculate the implied annual probability of default for DEF PLC. a) 2.62% b) 2.66% c) 2.56% d) 1.60% e) 3.96%