Betta tells Marlin that he believes that, compared with structural models, reduced form models better match actual market conditions in assessing credit. In developing a reduced form model, Betta considers the inputs provided in Exhibit 2.
EXHIBIT 2
INPUTS FOR REDUCED-FORM MODEL
| Input | Variable |
|---|---|
| 1 | Bay Corp zero-coupon bond maturing in 2025 |
| 2 | Bay Corp 4% coupon bond maturing in 2037 |
| 3 | Inflation rate, growth rate of GDP |
| 4 | Riskless interest rate, level of unemployment |
| 5 | Market value of Bay Corp assets |
| 6 | Bay Corp privately held equity value |
Q. Which inputs listed in Exhibit 2 are most likely required in Betta’s development of a reduced form model?
- Inputs 2, 3, and 4
- Inputs 1, 5, and 6
- Inputs 2, 3, and 6
这是2018mock 下午52题，我只知道这个模型假设了公司有一个0息债券，所以我算的 2，但是答案是1，没有inputs 1 ，不太理解，其他的参数都不太清楚，可否解释一下，谢谢
