FRM二级易错题精选:Cumulative probability

The cumulative probability of default for a note over tvvo years is 3.8%.If the probability of default during the first year is 1.5%,the probability of default during the second year is closest to:
 
A.2.96%
 
B.2.34%
 
C.3.17%
 
D.3.28%
 
FRM二级
 
Answer:B
 
The cumulative probability of default is equal to one minus the probabiJity of surviving to the end ofthe period without default:C2=1-(1-p1)(1-P2)0.038=1-(1-0.015)(1-P2)=>P2=0.0234
 
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