3) Assuming we are under monopoly and asymmetric information, what is the highest interest for which both types (safe and risky) stay in the market?

Group of answer choices

i=2

i=0.5

i=1

i=3

4)If this market is composed of 50% safe borrowers and 50% risky borrowers. What is the expected profit function (per loan) for the lender when the interest rate is 0.7

Group of answer choices

200i - 40

100i -140

75i-45

0

150-75i

6If this market is composed of 50% safe borrowers and 50% risky borrowers. What is the expected profit (per loan) for the lender when the interest rate is 1.5

Group of answer choices

0

-5

5

-10

10

400.00 300.00 200.00 100.00 0.00 -100.00 -200.00 -300.00 0.5 Objective functions 1:5 2 -E(YR) E(NS) 1 -E(YS) 2,5 -E(NR) 3.5 E(YS) 100-100i E(YR)=100-50i E(IIS) -20 +100i E(IIR)= -70 +50i 400.00 300.00 200.00 100.00 0.00 -100.00 -200.00 -300.00 0.5 Objective functions 1:5 2 -E(YR) E(NS) 1 -E(YS) 2,5 -E(NR) 3.5 E(YS) 100-100i E(YR)=100-50i E(IIS) -20 +100i E(IIR)= -70 +50i