308.1. In the reading, Malz³¹ solves the following equation to obtain a single hazard rate (λ) estimate given a single credit default swap (CDS) spread: $ \frac{445}{4 \times 10^4} \sum_{u=1}^{4 \cdot 5} e^{\frac{0.045 u}{4}} \left[ e^{-\lambda \frac{u}{4}} + \frac{1}{2} \left( e^{-\lambda \frac{u-1}{4}} - e^{-\lambda \frac{u}{4}} \right) \right] = 0.60 \sum_{u=1}^{4 \cdot 5} e^{\frac{0.045 u}{4}} \begin{pmatrix} e^{-\lambda \frac{u-1}{4}} & -e^{-\lambda \frac{u}{4}} \end{pmatrix} $ **Source:** Allan Malz, *Financial Risk Management: Models, History, and Institutions* (Hoboken, NJ: John Wiley & Sons, 2011) In regard to this equation, each of the following is true EXCEPT, which is false? | Financial Risk Manager Part 2 Quiz - LeetQuiz