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Consider the Case of ABC Company

Question 43

Multiple Choice

Consider the case of ABC Company. The company's marginal probability of default in year 1 is 0.03 and 0.08 in year 2. What is ABC Company's cumulative default probability (round to two decimals) ?


A) 14.00 per cent
B) 11.00 per cent
C) 99.76 per cent
D) 10.76 per cent

Correct Answer:

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