What are the 7 year historical hazard rates that would be calculated from Table below...

90.2K

Verified Solution

Question

Finance

What are the 7 year historical hazard rates that would be calculated from Table below for companies with different credit ratings? Assuming a .4 recovery rate, what credit spread is necessary to compensate for these hazard rates?

RatingTime (years) 1234571015AAA 0.00 0.03 0.13 0.24 0.35 0.51 0.70 0.91AA 0.02 0.06 0.12 0.21 0.31 0.50 0.72 1.02A 0.05 0.14 0.23 0.35 0.47 0.79 1.24 1.89BBB 0.16 0.45 0.78 1.17 1.58 2.33 3.32 4.69BB 0.61 1.92 3.48 5.05 6.52 9.0111.7814.67B 3.33 7.7111.5514.5816.9320.3623.7427.12C27.0836.6441.4144.146.1948.2650.3852.59

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students