Suppose the Talcum Corporation has promised to pay $500 on 31 March 2024. The risk-free yield to

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Suppose the Talcum Corporation has promised to pay $500 on 31 March 2024. The risk-free yield to that date is 1.325%, and the credit spread for Talcum is 0.65%. Today is 10 Oct 2019. What are the credit-adjusted valuation, risk-free valuation and PV of expected loss on that promise?

Posted Date: May 20, 2024 12:05 AM

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Suppose the Talcum Corporation has promised to pay $500 on 31 March 2024. The risk-free yield to

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