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The yield on 3 - month T bill is 4 . 3 7 % . The yield on 3 - month Banker's acceptance is 5

The yield on

3 -

month T bill is

4.37 % .

The yield on

3 -

month Banker's acceptance is

5.1867 % .

Assume that investors get

30 %

of the face value when commercial paper defaults. What is the probability of default of the Banker's acceptance?

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