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Intro A company will earn net profits of $200,000 if the economy booms (probability of 50%) and net profits of $60,000 if the economy enters
Intro A company will earn net profits of $200,000 if the economy booms (probability of 50%) and net profits of $60,000 if the economy enters a recession (probability of 50%). The company wants to take out a loan to finance its operations. Treasuries of the same maturity offer an interest rate of 6%. Assume risk neutrality. Part 1 |* Attempt 1/3 for 10 pts. What interest rate should the bank quote if the company asks for a loan for $82,000? 3+ decimals Submit Part 2 | Attempt 1/3 for 10 pts. What interest rate should the bank quote if the company asks for a loan for $92,000? 3+ decimals Submit
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