Solved

Suppose the Default Probability of a Firm, Conditional on It

Question 18

Multiple Choice

Suppose the default probability of a firm, conditional on it not having defaulted so far, is 0.10 per year. What is the 5-year survival probability of the firm?


A) 49%
B) 51%
C) 59%
D) 61%

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q13: A zero coupon bond with a maturity

Q14: If the hazard rate is

Q15: The average default rate in the economy

Q16: Consider a one-year zero-coupon defaultable bond.

Q17: The hazard rate for a firm

Q19: Suppose we have a zero-coupon bond that

Q20: Suppose we have a zero-coupon bond that

Q21: There are two ratings in a

Q22: The probability of a firm defaulting each

Q23: If the rate of defaults per