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Bob has formed an LCC in order to finance a one-period investment project. The project requires an investment of 1,000 and has a 1/2 probability
Bob has formed an LCC in order to finance a one-period investment project. The project requires an investment of 1,000 and has a 1/2 probability of yielding 2,100 and a 1/2 probability of yielding 900. If Alice decides to lend the money to Bob at an insert rate of 25%, her expected rate of return will be ___%.
A.) 5
B.) 25
C.) 12.5
D.) 7.5
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