Consider Two Firms with Hazard Rates $\lambda _ { 1 } = 0.10$

Multiple Choice

Consider two firms with hazard rates $\lambda _ { 1 } = 0.10$ and $\lambda _ { 2 } = 0.05$ . The correlation of their default times is zero. What is the approximate probability that both firms default within five years?

A) 5%
B) 9%
C) 13%
D) 17%