Assume That I₁ = 11 Per Cent and I₂ =

Multiple Choice

Assume that i₁ = 11 per cent and i₂ = 12 per cent, and that k₁ = 14.50 per cent and k₂ = 16.50 per cent. What is the expected probability of repayment on the one-year corporate bonds in one year's time (round to two decimals) ?

A) 86.99 per cent
B) 81.47 per cent
C) 86.50 per cent
D) 95.34 per cent