Serving the Quantitative Finance Community
V(Defaultable Bond) = V(Non-defaultable Bond) + V(CDS)
Is this accurate to say thatV(Defaultable Bond) = V(Non-defaultable Bond) + V(CDS),where - Defaultable as weel as Non-defaultable bonds have the same maturities, coupon rates, and the like- Defaultable bond is the underlying of the CDSCan one interprete V(CDS) as a "fair" credit spread for the defaultable bond?What are the other ways to figure out the "fair" credit spread? How close those "fair" credit spreads to the market spreads?