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 ad1c9bdddf
For one year bond:
Bond trading price=$100
Bond trading price is assessed.