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Given maturities of 1,2- and 20-year bonds with respective yields of 4, 5 and 11 percent. These b...

Given maturities of 1,2- and 20-year bonds with respective yields of 4, 5 and 11 percent. These bonds have rated yields at 7, 9, and 16 percent.

What is the implied probability of repayment on one-year B-rated debt?

What is B-rated debt bonds and implied probability represent here? Show work and discuss the importance of implied probability.

PLEASE SHOW WORK!

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Answer #1

As Pe -the ve Queon Sespecfve ields o,5 and . Thuse bonds have stated fields a 1, and 16 Pacent menr on onee-ated dmon 81 annualised dehuit Sakes Global C88ale anual deaut gares by satirg Catego 00.0.18 .13 0016 | ο.co | .0 . 00 | 0.00 | 0,3 1-0.031} 0.9688 19 6.58 % 0.0415 ment- 5,841, .019/f S. The bonds witt hig est gating would be iven lahvean ha susk fea bond of u%. cand his

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