Given maturities of 1,2- and 20-year bonds with respective yields of 4, 5 and 11...
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Given maturities of 1,2- and 20-year bonds with respective yields of 4, 5 and 11 percent. These bonds have rated yields at 7, 9, and 16 percent.What is the implied probability of repayment on one-year B-rated debt? What is B-rated debt bonds and implied probability represent here? Show work and discuss the importance of implied probability.
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