17. ABC Corporation borrowed $50,000 (face value) for 3 years at 6.25% on a single-payment discount interest basis. What is the loan's effective interest rate? Suppose the risk-free rate is 4%. Consider the following three borrowers: A, B, and C. Their probability of repayment (p) is .95, .92, and .90, respectively, with associated gammas of .3, .4, and .6, respectively. Where gamma recovery in the event of default. Which borrower would be charged the highest loan rate? How much would A's loan rate increase if the loan was unsecured?