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A loan is charged at 18.99 per cent, with an expected probability of default of 8.81 per cent. In the event of default, this bank

A loan is charged at 18.99 per cent, with an expected probability of default of 8.81 per cent. In the event of default, this bank expects a recovery rate of 27.6 per cent through the sale of collateral. Calculate the expected return on this loan.

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