A Stock Has a Probability of Jumping to Default Based $\lambda = 0.05$

question 18

Multiple Choice

A stock has a probability of jumping to default based on the first arrival of a Poisson process with $\lambda = 0.05$ . What is the probability of a jump-to-default in any month?

• A) 0.4158%
• B) 0.4167%
• C) 0.4195%
• D) 0.5000%

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