Hi!
Have the following question from a problem set:
"now price a bond that is of a 4 year maturity and if it defaults in year before maturity incurs a loss of p%, but it does not terminate"
as I understand this is a defaultable bond pricing question; but the formula calls for the probabilities?
I do not want an answer but, could someone point me in the direction of the topic to read or maybe some helpful information?
Thank you in advance!
Have the following question from a problem set:
"now price a bond that is of a 4 year maturity and if it defaults in year before maturity incurs a loss of p%, but it does not terminate"
as I understand this is a defaultable bond pricing question; but the formula calls for the probabilities?
I do not want an answer but, could someone point me in the direction of the topic to read or maybe some helpful information?
Thank you in advance!
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