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    Bond trading price

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    Assume one firm issues two bonds, a one-year bond trading at $100 with a $6 annual coupon and a two-year bond trading at $100 with a $7 annual coupon. Assume recovery is 50% for these two bonds if defaulted, what's the survival probability of this firm for one year and two years?

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    Solution Preview

    Given that,
    For one year bond:
    Bond trading price=$100
    Annual ...

    Solution Summary

    Bond trading price is assessed.