Suppose the Default Probability of a Firm,conditional on It Not

question 5

Multiple Choice

Suppose the default probability of a firm,conditional on it not having defaulted so far,is 0.10 per year.What is the 5-year survival probability of the firm?

• A)49%
• B)51%
• C)59%
• D)61%

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Definitions:

Alternative Evaluation

The process in which consumers compare different products or brands on various attributes to make a purchasing decision.

Consideration Set

A group of brands or products a consumer evaluates when making a purchase decision.

Criteria

Standards or benchmarks used to evaluate or make decisions about something.

Postpurchase Behavior

The actions and reactions of consumers after buying and using a product, including levels of satisfaction, repeat purchases, and feedback or complaints.