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1. The spread between the yield on a 3-year corporate bond and the yield on a similar riskfree bond is 50 basis points. The recovery rate is 30%. Estimate the average hazard rate per year over the 3-year period.
2. Suppose that in Problem the spread between the yield on a 5-year bond issued by the same company and the yield on a similar risk-free bond is 60 basis points. Assume the same recovery rate of 30%. Estimate the average hazard rate per year over the 5-year period. What do your results indicate about the average hazard rate in years 4 and 5?
Problem :The spread between the yield on a 3-year corporate bond and the yield on a similar riskfree bond is 50 basis points. The recovery rate is 30%. Estimate the average hazard rate per year over the 3-year period.
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Billy and Mandy Jones have $24,000 to invest. On average, they do not make any investment that will not return at least 7.4% per year. They have been approached with an investment opportunity that requires $24,000 upfront and has a payout of $5,900 a..
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Identify and discuss some of the primary risks the company faces in the near future and create a table showing the stock prices for the past five years
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What is the present value of the following annuity $4323 every year at the end of each year for the next 6 years, discounted back to the present at 18.05 percent per year compounded annually
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