easy · Quantitative Finance qf-core
Using the 'Rule of Thumb' for credit spreads, if a 5-year corporate bond has a spread of 240 basis points (0.0240) over the risk-free rate and an assumed recovery rate of 40%, what is the implied annual hazard rate λ?
- 2.4%
- 6%
- 1.44%
- 4%
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