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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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