A company will earn net profits of $200,000 if the economy booms (probability of 90%) and net profits of $60,000 if the economy enters a recession (probability of 10%). The company wants to take out a loan to finance its operations.

Intro A company will earn net profits of $200,000 if the economy booms (probability of 90%) and net profits of $60,000 if the economy enters a recession (probability of 10%). The company wants to take out a loan to finance its operations. Treasuries of the same maturity offer an interest rate of 8%. Assume risk neutrality. Part 1 Attempt 1/10 for 10 pts. What interest rate should the bank quote if the company asks for a loan for $77,000? 3+ decimals Submit | Attempt 1/10 for 10 pts. Part 2 What interest rate should the bank quote if the company asks for a loan for $87,000? 3+ decimals Submit