Relationship Banking. Kuraly&Acciari, Inc., can choose one of two projects: safe and risky. The safe project yields $150 with probability 0.9 and zero with probability 0.1, whereas the risky project yields $175 with probability 0.56 and zero with probability 0.44. Each project requires an investment of $100, which K&A must borrow. The bank can make only an unsecured loan, and cannot observe the firms choice of project. Agents are risk neutral, and the risk-free rate is zero. a. Find the maximum interest rate, imax, the bank can charge and still have K&A choose the safe project. Ans. 8.82%. b. Find the rate at which the bank breaks even (earns only the cost of funds) on a single loan. Ans. 11.11%. Will the bank make just one loan?