Question
Suppose that I ask you to lend me $200 for one year at a 5% promised interest rate. You believe that I will fully pay
Suppose that I ask you to lend me $200 for one year at a 5% promised interest rate. You believe that I will fully pay you the $210 with 95% probability; that I will only repay $100 with 1% probability; and that I will repay nothing with 4% probability. What is your expected rate of return?
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TExES Business And Finance Secrets Study Guide
Authors: TExES Exam Secrets Test Prep Team
1st Edition
1516706862, 978-1516706860
