1. Default probability What variables are required to use a market-based approach to calculate the probability that a company will default on its debt? 2. Ratings transition You have an A-rated bond....

1. Default probability What variables are required to use a market-based approach to calculate the probability that a company will default on its debt?

2. Ratings transition You have an A-rated bond. Is a rise in rating more likely than a fall? Would your answer be the same if the bond were B-rated?

May 26, 2022

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1. Default probability What variables are required to use a market-based approach to calculate the probability that a company will default on its debt? 2. Ratings transition You have an A-rated bond....

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