What is the probability of default each


The 1, 2, 3, 4, and 5-year CDS spreads are 120, 140, 150, 157, and 162 basis points, respectively. The risk-free rate is 2% for all maturities, the recovery rate is 40%, and payments are quarterly. Calculate the hazard rate each year. What is the probability of default each year?

 

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Financial Management: What is the probability of default each
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