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The yield on 3-month T bill is 1%. The yield on 3-month commercial paper is 1.88%. Assume that investors get 60% of the face value

The yield on 3-month T bill is 1%.

The yield on 3-month commercial paper is 1.88%.

Assume that investors get 60% of the face value when commercial paper defaults.

What is the probability of default of the commercial paper?

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