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Could you please explain how to solve this problem Assume that there are two groups of borrowers in the economy: i E {9,b}. The groups

Could you please explain how to solve this problem

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Assume that there are two groups of borrowers in the economy: i E {9,b}. The groups are of the same size. To start a project, borrowers need to take a loan of size 1. The return to the borrower's project depends on the borrower's type: it is R' + li with probability 1/2 and R' Ti otherwise, where xg

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