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    Exam 31: Reduced-Form Models of Default Risk
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    If the Rate of Defaults Per Year in a Set\[\lambda = 5\]
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If the Rate of Defaults Per Year in a Set λ=5\lambda = 5λ=5

Question 14

Question 14

Multiple Choice

If the rate of defaults per year in a set of companies is given by λ=5\lambda = 5λ=5 ,what is the probability of four or more defaults in half a year?


A) 0.06
B) 0.12
C) 0.18
D) 0.24

Correct Answer:

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