Suppose that the risk-free zero-coupon yield curve is flat at 3% per annum with continuous compounding and that defaults (if one occurs in a particular year) will happen halfway through the year in a new four-year credit default swap. You have estimated that the expected recovery rate is 25% and the hazard rate () is 2.80%. Assume that the CDS payments will be made annually in arrears.(a) Estimate the credit default swap spread using Equation 24.2 from the text.(b) Calculate the credit default swap spread using the available information to model the cash flows of the CDS. Use the equation:V(t) = etto determine the likelihood of survival at each potential default time.(c) How do your two answers differ? Why?