The Hazard rate for a reference entity is 16.98% each year. Assume payments are made annually in arrears. Assume that default, if it happens, always happens exactly halfway through a year. Assume that the expected recovery rate is 21%. Assume that the Treasury-Spot curve is flat at 9% with continuous compounding. Assume Notional Principal = $1. What is the expected payout in case of a credit event in 2.5 years on this 5-year CDS?

		a. 0.092455
		b. 0.060484
		c. 0.048516
		d. 0.035453
		e. 0.025182

The Hazard rate for a reference entity is 16.98% each year. Assume payments are made annually in arrears. Assume that the Treasury-Spot curve is flat at 9% with continuous compounding. Assume Notional Principal = $1. Assume the spread on this 5-year CDS is s. What is the present value of expected premium payment in year 4 in terms of s?

The Hazard rate for a reference entity is 16.98% each year. Assume payments are made annually in arrears. Assume that the Treasury-Spot curve is flat at 9 with continuous compounding. Assume Notional Principal = $1. Assume the spread on this 5-year CDS is s. What is the present value of ALL expected premium payments on this 5-year CDS in terms of s?

		a. 2.354139s
		b. 3.214515s
		c. 3.002453s
		d. 2.065455s
		e. 1.965845s

The Hazard rate for a reference entity is 16.98% each year. Assume payments are made annually in arrears. Assume that default, if it happens, always happens exactly halfway through a year. Assume that the expected recovery rate is 21%. Assume that the Treasury-Spot curve is flat at 9% with continuous compounding. Assume Notional Principal = $1. What is the present value of ALL expected payoffs in case of a credit event on this 5-year CDS?

		a. 0.924455
		b. 0.604484
		c. 0.485516
		d. 0.397885
		e. 0.225182