Consider Two Firms with Hazard Rates $$\lambda _ { 1 } = 0.10$$

question 23

Multiple Choice

Consider two firms with hazard rates $$\lambda _ { 1 } = 0.10$$ and $$\lambda _ { 2 } = 0.05$$ .The correlation of their default times is zero.What is the approximate probability that both firms default within five years?

• A)5%
• B)9%
• C)13%
• D)17%

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Definitions:

Remedies

Legal means or methods for enforcing a right or redressing a wrong, including compensation, restitution, and injunctions.

Court

An institution that has the authority to adjudicate legal disputes between parties and administer justice in civil, criminal, and administrative matters.

Independent Contractor

An individual or entity engaged to perform work for another entity as a non-employee, often with greater control over their work methods.

Legal Action

A formal proceeding by which a party seeks a legal remedy in a court of law.