The Shaky Industries Corporation has decided to raise money by issuing one-year bonds. Investors consider the bonds to have a 10% probability of default and a 60% recovery rate in the event of default (the investor loses the interest on her investment and 40% of the amount invested). The risk-free rate is 6%. If investors were risk-neutral, the promised yield on the bond would have to be ____ %. If investors were risk-averse and required a risk premium of 3% on the bonds, the promised yield would have to be _____%.

Group of answer choices

6.7; 9.7

11.1; 14.4

6.0; 9.0

11.1; 14.1