Question 4 0/1 pts A 1-year zero-coupon Treasury bond has a promised yield of 4.0% and a 1-year zero- coupon corporate bond has a promised yield of 5.4%. The corporate bond has an expected recovery rate of 63%. All rates are annualized assuming periodicity of 1 (i.e. annual compounding). Given this information, what is the implied default probability. on the corporate bond? (If your solution is 4.44% then enter "4.44" as the answer. Precision is 0.01+/- 0.02.) You Answered 1.33 Correct Answer 3.59 margin of error +/- 0.02 Let p be the probability of survival (no default). Then, 1+r on risk-free bond = p(1+r on risky bond) + (1-p)(1+r on risky bond) (Recovery rate) Solve for p and then calculate 1-p