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?
© BrainMass Inc. brainmass.com March 4, 2021, 9:56 pm ad1c9bdddfhttps://brainmass.com/economics/bonds/bond-trading-price-284491
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Answer:
Given that,
For one year bond:
Bond trading price=$100
Annual ...
Solution Summary
Bond trading price is assessed.
$2.49