Laurentide Resorts Is Issuing Commercial Paper with 60 Days to Maturity.In

question 42

Multiple Choice

Laurentide Resorts is issuing commercial paper with 60 days to maturity.In case of default, the investor will lose the total amount.The quoted rate for the issue is 7%, and an equivalent government-backed security's rate is 6%.What is the probability of default?

• A)0%
• B)0.93%
• C)1%
• D)99.06%