A large number of independent loan prospects are available, each paying a net return (on $100) of $24 with probability 1/4 and $4 with probability 3/4. There are as many savers, each with $100 to lend, as there are loans. Each saver derives Utility (U) from income(I) according to: There is competition between intermediaries and each has costs--including "normal" profits--of $.40 on every $100 invested. What return will intermediaries pay? Why? At this rate will they attract savers away from "going-it-alone-" from lending directly, with each saver making a single loan? How do you know? What is the gain in Happiness per saver from the existence of intermediaries? If there were a single intermediary with no competition, what return would the intermediary seeking maximum profit offer? Explain