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Assume the following values for probability of default t+1 t+2 t+3 t+4 t+5 A 0.3 B 0 0 0 0.5 Assume a 5 year, 10%, $1000 face value bond is bought at...
Assume the following values for probability of default
t+1 t+2 t+3 t+4 t+5
A 0.3 0.3 0.3 0.3 0.3
B 0 0 0 0.5 0.5
- Assume a 5 year, 10%, $1000 face value bond is bought at par: $1000. Calculate the yields on the two bonds. Which is higher?