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Magong Community Bank has a R 9 0 0 million loan with Sedibelo Construction with a maturity of one year. The probability of default on

Magong Community Bank has a R900 million loan with Sedibelo Construction with a
maturity of one year. The probability of default on the loan is 1.85% and the recovery
rate is assumed to be 25%. Calculate the expected loss for Magong Community Banks
loan to Sedibelo Construction?

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