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There are two types of borrowers in the credit market for motorcycle loans, type X, and type R. They both need a loan for $37,600,
There are two types of borrowers in the credit market for motorcycle loans, type X, and type R. They both need a loan for $37,600, for a Ducati. Type X repays 96% of the time and type R repays 84% of the time. If the lending bank, Street Bank, has full information, then the risk premium for X is ____% and for R it is ____%.
Group of answer choices
A) 5.1; 19
B) 4.2; 19
C) 5.1; 15.5
D) 4.2; 15.5
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