Problem 15 Intro A company will earn net profits of $100,000 if the economy booms (probability of 40%) and net profits of $60,000 if the economy enters a recession (probability of 60%). The company wants to take out a loan for $86,000 to finance its operations. Treasuries of the same maturity offer an interest rate of 7%. Assume risk neutrality. Part 1 Attempt 1/3 for 10 pts. What payoff would the bank receive if it invested $86,000 in Treasuries? 0+ decimals Submit Part 2 - Attempt 1/3 for 10 pts. What payout should the bank be looking for during the boom (in $)? 0+ decimals * Attempt 1/3 for 10 pts. Part 3 What interest rate should the bank quote? 2+ decimals Submit Problem 15 Intro A company will earn net profits of $100,000 if the economy booms (probability of 40%) and net profits of $60,000 if the economy enters a recession (probability of 60%). The company wants to take out a loan for $86,000 to finance its operations. Treasuries of the same maturity offer an interest rate of 7%. Assume risk neutrality. Part 1 Attempt 1/3 for 10 pts. What payoff would the bank receive if it invested $86,000 in Treasuries? 0+ decimals Submit Part 2 - Attempt 1/3 for 10 pts. What payout should the bank be looking for during the boom (in $)? 0+ decimals * Attempt 1/3 for 10 pts. Part 3 What interest rate should the bank quote? 2+ decimals Submit