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The annual marginal probability of defau...

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题目

The annual marginal probability of default of a bond is 15% in year 1 and 20% in year 2. What is the probability of the bond surviving (i.e. no default) to the end of two years?

选项

A.68%

B.65%

C.80%

D.85%

答案

A

解析

Probability (no default)=(1-15%)×(1-20%)=68%Probability (不违约)=(1-15%)×(1-20%)=68%