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February 28th, 2014, 04:19 AM  #1 
Newbie Joined: Feb 2014 Posts: 1 Thanks: 0  Defaultable bond questn
Hi, this is more of a finance question, so not sure where to post it. "now price a bond that is of a 4 year maturity and if it defaults in year t+k incurs a loss of 20%, but it does not terminate, and continues to be traded up to and including the fourth year" I do not want the answer, just if someone could point at the general topic to read in regards to this or the approporiate bond pricing formula, as I understand this is not a normal bond pricing forumla, but must include the probability of default as well? Thank you in advance! 

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