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Using the Term Structure of Default Probabilities, the Implied Default

Question 38

Multiple Choice

Using the term structure of default probabilities, the implied default probability for BBB corporate debt during the current year is

A) 98.0 percent.
B) 2.35 percent.
C) 4.19 percent.
D) 3.90 percent.
E) 2.71 percent. [Refer to: 10-114]

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