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Quiz Instructions In this problem, the lender faces a single type of borrower who has a choice between two activities: Project 1 or Project 2
Quiz Instructions In this problem, the lender faces a single type of borrower who has a choice between two activities: Project 1 or Project 2 Given the four objective functions and the figure below, answer Question 1-0. 300 Expected Income/ Profit Interest Rate BY1) -E|Y2) Expected income from Project 1: Ely1) - 180 - 60i Expected income from Project 2:E(y2) - 225 - 78i Expected profit from the loan to support Project 1: Expi1) - -30 + 60i Expected profit from the loan to support Project 2: O(pi2) - -50 + 35iQuestion 4 2 pts Under asymmetric information & monopoly, in equilibrium, what project the borrowers would take? O Project 1 O It can not be determined Project 2 Question 5 2 pts Under symmetric information & monopoly, what interest rate i would be charged in equilibrium? Note: Round your final answer to two decimal places. Question & 2 pts Under symmetric information & monopoly, in equilibrium, what project would the lender make the borrower take? O Project 2 It can not be determined O Project 1 Question 7 O pts Under asymmetric information & perfect competition, what interest rate i would be charged in equilibrium? Note: Round your final answer to two decimal places. Question 8 0 pts Under symmetric information & perfect competition, what interest rate i would be charged in equilibrium? Note: Round your final answer to two decimal places
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