Assume the interest rate in the market for one-year zero-coupon government bonds is i = 8% and the rate for one-year zero-coupon grade BBB bonds is k = 10.2%.What is the implied probability of repayment on the corporate bond (round to two decimals) ?
A) 2.00%
B) 2.04%
C) 97.96%
D) 98.00%
Correct Answer:
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