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(Rate with LGD, risk-neutral lender) Assume a bank can invest in a government bond at a risk-free rate of 4.33%. Alternatively, it can invest in

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(Rate with LGD, risk-neutral lender) Assume a bank can invest in a government bond at a risk-free rate of 4.33%. Alternatively, it can invest in a corporate bond with a default probability of 3.1%. If the issuer defaults, the bank expects to recover 56% of the investment. A risk-neutral bank would be indifferent between investing in the government bond and the corporate bond if the corporate bond offers a rate of \%. Round to the nearest 0.01%, drop the % symbol. E.g." If your answer is 0.08365 or 8.365%, record it as 8.37

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