Portfolio consisting of a $10 million, 10%, 3-year par yield corporate bond and a long position in a 3-year CDS . The payout will be notional (100-B) where B is the price of the bond at expiration, if the credit event occurs; Expected default probability in each of the next three years is 4%; recovery rate is 30%. Assuming that CDS premium is paid the year end and default only happens exactly at the middle of the year; T-note trades at 7%. Calculate the CDS premium using 

a. The risk neutral probability approach .

b. The actuarial approach 1.

c. The bond credit spread approach.