4.Suppose a bank knows that one-third of potential borrowers are riskless, 1/3 are highly risky, and the last 1/3 fall in between. It decides that the riskless interest rate is 2%, the riskiest is 6%, and middling borrowers will pay 4%. Because the economy is engulfed in financial crisis at present, the bank has lost all of its ability to screen the riskiness of its potential borrowers and is thus facing the lemons problem. What interest rate should the bank charge all of its loan applicants? How will the risky borrowers respond? What about the riskless? In light of this, would you consider the credit market to be working well? Explain.