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The buyer of a 2-year CDS pays 5000 Euros every quarter to the seller of the swap. The notional principal of the CDS is 1

The buyer of a 2-year CDS pays 5000 Euros every quarter to the seller of the swap. The notional principal of the CDS is 1 million Euros. The recovery rate is 60%. The CDS spread in basis points is_____?

What is the average PD over 2 years in decimals assume that 5-year CDS for the same reference entity has a CDS spread of 250 basis points what is the average PD between years 2 and 5 in decimals?


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