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20. A bank has made a loan charging a base lending rate of 8%. It expects a probability of default of 5%. If the loan

20.

A bank has made a loan charging a base lending rate of 8%. It expects a probability of default of 5%. If the loan is defaulted, it expects to recover 54% of its money through the sale of its collateral. The expected return on this loan is _____% (rounded to two decimal places).

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