What is the probability that two year B rated corporate debt will be fully repaid A 92 9 percent B 95 6 percent C 97 2 percent D 7 10 percent E 4 40 percent The correct answer is A 95 6 percent The following represents two yield curves Matuity Pre Discount B rated Corporate Bond Yields Treasury Yields Pure Discount Bonds) 1 year 2 year 0 year 3 percent 6 percent 12 percent 6 percent 10 percent 17 percent The following represents two yield curves Matuity Pre Discount B rated Corporate Bond Yields Treasury Yields Pure Discount Bonds) 1 year 2 year 0 year 3 percent 6 percent 12 percent 6 percent 10 percent 17 percent

Question

What is the probability that two year B rated corporate debt will be fully repaid  A  92 9 percent  B  95 6 percent  C  97 2 percent  D  7 10 percent  E  4 40 percent  The correct answer is A 95 6 percent  The following represents two yield curves  Matuity Pre Discount B rated Corporate Bond Yields Treasury Yields Pure Discount Bonds) 1 year 2 year 0 year 3 percent 6 percent 12 percent 6 percent 10 percent 17 percent The following represents two yield curves  Matuity Pre Discount B rated Corporate Bond Yields Treasury Yields Pure Discount Bonds) 1 year 2 year 0 year 3 percent 6 percent 12 percent 6 percent 10 percent 17 percent

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Question

What is the probability that two-year B-rated corporate debt will be fully repaid? A. 92.9 percent. B. 95.6 percent. C. 97.2 percent. D. 7.10 percent.

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