The hazard rate for a firm evolves as follows: $\lambda ( t ) = 0.2 + 0.5 t$ . The probability of the firm defaulting in the next year is:
A) 0.24
B) 0.36
C) 0.48
D) 0.60

Question

Quizplus · Accepted Answer

The Answer of The hazard rate for a firm evolves as follows: $\lambda ( t ) = 0.2 + 0.5 t$ . The probability of the firm defaulting in the next year is:
A) 0.24
B) 0.36
C) 0.48
D) 0.60

The Hazard Rate for a Firm Evolves as Follows λ(t)=0.2+0.5t\lambda ( t ) = 0.2 + 0.5 tλ(t)=0.2+0.5t

The Hazard Rate for a Firm Evolves as Follows $\lambda ( t ) = 0.2 + 0.5 t$