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Question
A firm has a single issue of a zero coupon debt that promises to pay $90 in 4 years, and theA0 = $100, r = 5%, σ = 15%, and δ = 0. If the asset has no chance of total default, what is the value of the debt?
A) $67.10
B) $75.19
C) $85.62
D) $90.00
Answer
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Related questions
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