You assume the following information regarding the risk free interest rates and a debt-issuing (with a face value of $1,000) corporate respective interest rates:

Years	Risk Free Interest Rate	Corporate Interest Rate
1	4%	4.5%
2	4%	5.0%
3	4%	5.5%
4	4%	6.0%
5	4%	6.5%

What is the approximate default probability density in year 3?

Question 10 options:

	1.42%
	5.42%
	3.42%
	4.42%
	2.42%