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You own a bond with an annual coupon rate of 5% maturing in twoyears and priced at 87%. Suppose that there is a 12% chance

You own a bond with an annual coupon rate of 5% maturing in twoyears and priced at 87%. Suppose that there is a 12% chance that atmaturity the bond will default and you will receive only 40% of the 2 answers

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