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?
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? A.68%; B.65%; C.80%; D.85%