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You are evaluating a one year zero coupon bond, which you estimate has a 6 percent default probability. The current risk free rate is 2
You are evaluating a one year zero coupon bond, which you estimate has a 6 percent default probability. The current risk free rate is 2 percent. In case of default, similar bonds usually recover 31 pennies on the dollar owed. What rate of return would you require, at a minimum, on this investment?
Enter the answer in percents, accurate to two decimal places.
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