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Exercise 4-31 Algo An analyst estimates that the probability of default on a seven-year AA-rated bond is 0.52, while that on a r A-rated bond is 0.48. The probability that they will both default is 0.36. a. What is the probability that at least one of the bonds defaults? (Round your answer to 2 decimal places.) Probability b. What is the probability that neither the seven-year AA-rated bond nor the seven-year A-rated bond defaults? (Round your answer to 2 decimal places.) Probability c. Given that the seven-year AA-rated bond defaults, what is the probability that the seven-year A-rated bond also defaults? (Round your answer to 2 decimal places.) Probability

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-Ansuerg- iven that V- P (de-Ravi卜 on a seven-year AA-aled bond) =0.52 P (seven-yea r A^-rated bond) P ( Pro ba bilty thateyw what s the probability that. a+ least. One ot. tte bond s dețoull Answer 0.48 borh efau) a) 0.52+0.48-O.31 0.64 b) wht is tue f r o babi that neiher the Seven -year An -rated bond no the seven year 1- f(a-least one of-the bands delavihs) -Ans= - 1-0 60.3 c) given tharte: seven-year -AA-rated band dețaolts e proba bi litJ that- Seven -year- rebond Uso defaults

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