If the Bond Has a 15% Probability of Default and Payment

question 15

Multiple Choice

If the bond has a 15% probability of default and payment under default is $400,calculate the expected payment from the bond.

• A)$1,050.00
• B)$400.00
• C)$952.50
• D)$892.50

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Definitions:

Minor Term

The term that appears as the subject in the conclusion of a categorical syllogism and in one of the premises.

Middle Term

In a syllogism, the term that appears in both premises but not in the conclusion, serving as the link between the major and minor premises.

Categorical Syllogism

A form of deductive reasoning consisting of three propositions: two premises and a conclusion, each stating something about categories of things.

Mood

In logic, the mood of a categorical syllogism refers to the arrangement or type of the categorical propositions (A, E, I, O) it contains.