What is the break-even default rate?A) 3.2%B) 4.1%C) 4.8%D) 5.2%E) 5.5%

Question

What is the break-even default rate?A)  3.2%B)  4.1%C)  4.8%D)  5.2%E)  5.5%

Pritin Sachdeva · Accepted Answer

Final Answer : C, Explanation :  The break-even default rate is the rate at which the expected loss from defaults equals the yield spread over the risk-free rate. In this context, 4.8% is the correct break-even default rate.

What is the break-even default rate?

A) 3.2%
B) 4.1%
C) 4.8%
D) 5.2%
E) 5.5%

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