Given the following information, what is the probability of default for this zero- coupon bond that matures in one year?
 
Face value of bond   $100
 
Market price of bond  $86
 
Risk-free rate             5%
 
A. 9.70%.
 
B. 30.71%.
 
C. 10.74%.
 
D. 35.21%.
 
Answer:A


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