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Which of the following is true? Select one: a. Recovery rates are positively correlated with default rates b. Recovery rates are lower for investment grade
Which of the following is true? Select one: a. Recovery rates are positively correlated with default rates b. Recovery rates are lower for investment grade companies c. Recovery rates are negatively correlated with default rates d. Recovery rates are higher for non-investment grade companies Question 13 ot yet answered Marked out of 3.00 p Flag question Which of the following is true? Select one: a. There is no difference between conditional and unconditional default probabilities because a company can only default once. b. Conditional default probabilities are sometimes lower and sometimes higher than unconditional default probabilities. c. Conditional default probabilities are at least as high as unconditional default probabilities d. Conditional default probabilities are at least as low as unconditional default probabilities Suppose that the cumulative probability of a company defaulting by years one, two, three and four are 3%,6.5%,10%, and 14.5%, respectively. What is the probability of default in the fourth-year conditional on no earlier default? Select one: a. 4.5% b. 5.0% c. 5.5% d. 6.0%
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