<p>Consider the following case:</p>

<p>Country P uses the currency <strong>Euro</strong> and gives p percent interest on a one year bond issued in <strong>Euro</strong>.</p>

<p>Country Q uses the currency <strong>TL</strong> and gives q percent interest on a one year bond issued in <strong>Euro</strong>.</p>

<h2>Question:</h2>

<p>How can we determine the probability of default of the country Q with respect to P ?</p>

CC BY-SA 4.0
2018-06-08T10:41:54.157Z
[Cross-posted](https://economics.stackexchange.com/q/22368/5733).
Bob Jansen
CC BY-SA 4.0
2018-06-08T12:19:43.393Z
@BobJansen You have given the link of this question. Plus, I asked the question first in here, and second in Quantitative Finance SE, and stated there that I have cross posted, see https://quant.stackexchange.com/questions/40230/how-to-determine-the-default-probability-of-a-county-in-a-bond-that-is-not-in-it
Our
CC BY-SA 4.0
2018-06-08T13:54:36.727Z
I can't edit any more. The goal of pointing out that something is cross-posted is that users on both sites can check whether the question already has an answer on the other site. NB: Cross-posted is discouraged in general, also when disclosed.
Bob Jansen
<bonds><government><probability><default>
How to determine the default probability of a county in a bond that is not in its native currency?
Our
# How to determine the default probability of a county in a bond that is not in its native currency?

(Asked by: username_0 on 2018-06-08)

Consider the following case:

Country P uses the currency **Euro** and gives p percent interest on a one year bond issued in **Euro**.

Country Q uses the currency **TL** and gives q percent interest on a one year bond issued in **Euro**.

## Question:

How can we determine the probability of default of the country Q with respect to P ?

**Tags:** bonds, government, probability, default
> **Comments:**
> **username_1**: [Cross-posted](https://economics.stackexchange.com/q/22368/5733).  
> **username_0**: @BobJansen You have given the link of this question. Plus, I asked the question first in here, and second in Quantitative Finance SE, and stated there that I have cross posted, see https://quant.stackexchange.com/questions/40230/how-to-determine-the-default-probability-of-a-county-in-a-bond-that-is-not-in-it  
> **username_1**: I can't edit any more. The goal of pointing out that something is cross-posted is that users on both sites can check whether the question already has an answer on the other site. NB: Cross-posted is discouraged in general, also when disclosed.  

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## 0 answers

