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A risk-free investment of $6000 will return 3.5%. A risky $6000 investment has a 21% chance of defaulting and returning only $3500. What default premium

A risk-free investment of $6000 will return 3.5%. A risky $6000 investment has a 21% chance of defaulting and returning only $3500. What default premium must the risky investment offer?

A.10.5%

B. 12.0%

C. 11.6%

D. 12.3%

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