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A firm wants to borrow $2,000,000 million to buy an asset whose current value is $2,139,362 million. The firm wants to take out the loan
A firm wants to borrow $2,000,000 million to buy an asset whose current value is $2,139,362 million. The firm wants to take out the loan for 2 years. The volatility of the asset's value is 19.00%. The risk free rate of interest is 1.90%. The dollar value of this loan to the bank is? O $1,798,813 O $1,618,932 O $1,772,947 O $2,068,635 The market risk premium the bank will charge is O 2.89% 4.54% O 3.4% O 3.91% If the bank estimates that the probability the lendr does not default is 29.93 percent, what is the estimated recovery rate? (your answer should be rounded to the nearest basis point and reported ##.##) percent
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