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2. For a one-month payday loan of $200, suppose the origination and servicing cost is $5, and r=.01 (per month). If the risk of default
2. For a one-month payday loan of $200, suppose the origination and servicing cost is $5, and r=.01 (per month). If the risk of default is 5% and the recovery rate is 10%, then what is the dollar fee required to provide the lender with their required expected return? $18.26 $14.57 $16.43 $17.11 $15.89 $17.74 2. For a one-month payday loan of $200, suppose the origination and servicing cost is $5, and r=.01 (per month). If the risk of default is 5% and the recovery rate is 10%, then what is the dollar fee required to provide the lender with their required expected return? $18.26 $14.57 $16.43 $17.11 $15.89 $17.74
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