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The spread on a one year BBB-rated bond relative to the risk-free Treasury of similar maturity is 2%. It is estimated that the contribution to

The spread on a one year BBB-rated bond relative to the risk-free Treasury of similar maturity is 2%. It is estimated that the contribution to this spread by all noncredit factors is 0.8%. Assuming the loss given default rate for the underlying credit is 60%.

What is, approximately the implied probability of default for this bond?

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