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What is the probability that no bond will default

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Reference no: EM132887020

Question - According to a credit rating agency, Moody's, the chance that a B-graded municipal bond defaults in a given year is 12%. Suppose that a hedge fund company currently owns 10 (all different) B-grade municipal bonds, and the default of one municipal bond is independent of other bonds. What is the probability that no bond will default in a given year?

Reference no: EM132887020

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