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Two type of borrowers: Risky(R) Safe(S) Both want a size loan of L lenders cost of funds (r) which is 10% The lender charged an

Two type of borrowers: Risky(R) Safe(S)

Both want a size loan of L

lenders cost of funds (r) which is 10%

The lender charged an interest rate (i) which is 40%

what is the probability (p) of the loan repayment, that the lender assumed?

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