Assume That I₁ = 11% and I₂ = 12%, and That

question 3

Multiple Choice

Assume that i₁ = 11% and i₂ = 12%, and that k₁ = 14.50% and k₂ = 16.50%.What is the expected probability of repayment on the one-year corporate bonds in one year's time (round to two decimals) ?

• A)86.99%
• B)81.47%
• C)86.50%
• D)95.34%

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