What is average yearly probability of default for company, Business Management

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What is average yearly probability of default for company

Problem

We observe that a five-year credit default swap (CDS)for a particular company has a price of 125 basis points per year and we are informed that the recovery rate in case of default for this type of company is 50%. What is the average yearly probability of default for this company, assuming no earlier default?

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Business Management: What is average yearly probability of default for company

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