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Basic Question 17 of 20
For a 10-year corporate bond the probability of default is estimated to be 2%. The expected recovery rate in the event of default is 70%. What is the expected loss?
B. 0.6%
C. 0.686
A. 1.4%
B. 0.6%
C. 0.686
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Learning Outcome Statements
describe credit risk and its components, probability of default and loss given default
CFA® 2025 Level I Curriculum, Volume 4, Module 14.