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Probability of no default within portfolio

A portfolio of bonds consists of five bonds whose default correlation is zero. The one-year probabilities of default of the bonds are: 1%, 2%, 5%, 10%, and 15%. What is the one-year probability of no default within the portfolio?

A. 71%

B. 67%

C. 85%

D. 99%.

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Finance Basics: Probability of no default within portfolio

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Probability of no default within portfolio

Reference No:- TGS0673749

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : Strips and principal-only

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Probability of no default within portfolio

Reference No:- TGS0673749

Recent Questions Asked Finance Basics

Q : Strips and principal-only

Q : Which statement is true for consolidated financial statement

Q : Treasury operations and risk management of islamic banks

Q : Determine expected credit loss of the portfolio

Q : Probability of no default within portfolio

Q : How fluctuation in exchange rates affect income statement

Q : Find net decrease in cash flow from forward contract hedge

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Q : Volatility of the value of a firm

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