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NEW QUESTION: 1
The probability of default on a bond is 3%, and in the case of default, investors expect to lose 70% of their investment. The bond's risk premium is 1.9%. The expected loss and the credit spread of the bond are, respectively:
A. 1.6% and 3.5%.
B. 2.1% and 4%.
C. 2.1% and 3%.
D. 1.6% and 2.5%.
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