A customer has approached a bank for a $50 000 one-year loan at 12% interest.If the bank does not approve, the $50 000 will be invested in bonds that earn a 6% annual return. Without further information, the bank feels that there is a 4% chance that the customer will default.If the customer totally defaults, the bank loses $50 000.At a cost of $500, the bank can thoroughly investigate the customer's credit record and supply a favorable/unfavorable recommendation. Past experience indicates that: