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Suppose a bonds observed credit spread of 160 basis points informs its hazard rate of default, where the assumed recovery rate is 36.0%. If the
Suppose a bonds observed credit spread of 160 basis points informs its hazard rate of default, where the assumed recovery rate is 36.0%. If the default is driven by a Poisson process, which is nearest to the five (5) year cumulative default probability?
A.12.50%
B.9.25%
C.8.00%
D.11.75%
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